Major offices receive healthy valuations amid coronavirus
Office powerhouse Dexus has completed the sale of a major Sydney tower at a price higher than its book value a year ago and flagged relatively strong property valuations, showing a dip of about $200m, as prime office towers hold up.
The group valued almost all of its properties and is benefiting from top office buildings still being chased by investors and demand for logistics assets rising at a time when shopping centre values are diving.
Dexus announced that 107 of its 118 assets, comprising 42 offices and 65 industrial complexes, had been externally valued, and these had have resulted in a total estimated decrease of about $195 million, or 1.2% prior book values.
“Our high quality property portfolios were in a strong position as we entered into a period of uncertainty driven by the onset of the COVID-19 pandemic, with their high occupancy levels, diversified tenant base, and limited new supply coming online in our key office markets,” Dexus chief executive Darren Steinberg says.
He said the valuations showed the resilience of the property portfolios in the uncertain environment. “The office portfolio experienced a circa 1.5 per cent decline on prior book values as a result of the softer assumptions relating to rental growth, downtime and incentives over the next 12 months,” Steinberg says.
The industrial portfolio lifted by about 0.7%, with the Dexus chief pointing to the investment attractiveness of the asset class, which has remained attractive despite harsher economic conditions.