OPINION: The latest cut in office property valuations looks modest compared to recent deals and the increase in bond yields. Investors appear to agree.
A wise old head of Australian investment markets recently reminded Chanticleer that there is a difference between price and value. The property portfolio revaluations announced on Wednesday by commercial property giant Dexus are a perfect case study.
But notably the group has slashed the value of its office property portfolio by 7.7 per cent, which looks particularly modest given Dexus recently sold a 26-storey Sydney office building What should investors make of these revaluations in the context of the Market Street deal and the fact capitalisation rates appear to have risen just 0.43 per cent in the last 12 months, despite Australia’s 10-year bond rate surging from 1.4 per cent to 3.9 per cent over since the start of last year.
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