Valuation of Dexus’ assets slips 1.9%

Oksana Patron

19 December 2022

The external independent valuation of 177 of Dexus’ 183 assets, comprising 34 office and 143 industrial properties, has resulted in an estimated decrease of around $322 million or 1.9% on prior book values for six months to 31 December.

The total of 183 assets included Jandakot Airport in Perth, which comprised 54 assets, originally acquired by Dexus in September, 2021, noting its intention to bring additional third party capital into the Jandakot structure prior to its completion.

In February this year, Dexus secured Australian super fund, Cbus Super, as its new joint venture investor which purchased a 33.3% interest in the Jandakot joint venture which owns 100% of Jandakot Airport.

A total estimated decrease also included assets held for sale at sale price and excluded expected settlement of assets prior to 31 December, 2022.

The 2.3% drop in the office portfolio on prior book and was driven by higher capitalisation rates and discount rates and partially offset by market rental growth.

At the same time, the industrial portfolio decreased around 0.5% on prior book values and saw strong rental growth largely offsetting the impact of higher capitalisation rates and discount rates.

“We expect a continued trend of well-located quality assets performing better than secondary assets against an uncertain macroeconomic backdrop,” Dexus chief executive, Darren Steinberg, said in the announcement made to the Australian Securities Exchange (ASX) on Friday.

The weighted average capitalisation rate across the total portfolio expanded by circa 16 basis points over the past six months from 4.64% at 30 June 2022 to 4.80% at 31 December 2022.