SYDNEY: Australian property firm Dexus has reported its second-steepest half-year loss since 2008 as higher rates slashed roughly A$600mil (US$387.24mil) off its large portfolio of office towers, although its chief executive officer (CEO) says the worst could soon be over.
The result yesterday from one of the country’s largest landlords with an A$11bil office portfolio comes six months after its first annual loss since 2009 and highlights how higher interest rates and the shift to home working continue to weigh on office tower owners around the world.
CEO Darren Steinberg said he believed the office sector was nearing the bottom, which should in turn help unfreeze a market that has seen very few sales as buyers wait to see how far prices will fall.
“What we’ll see is a small amount of further devaluation in the coming period as we get through to June and then you’ll see transaction activity pick up as we get into the third quarter of this calendar year and that should then enable a stabilisation of valuations,” he said in an interview.
Dexus recorded a statutory net loss after tax of A$597.2mil for the six months ended Dec 31 versus a A$23.1mil profit a year earlier,
However, an adjusted metric that excludes valuation changes beat expectations. Adjusted funds from operations (Affo) fell 5.9% to A$292.4mil and beat the Visible Alpha consensus by 11% on a per-security basis, according to Citi analysts.
Dexus expects Affo excluding trading profits to be broadly in line with last financial year. The half-year loss was driven by a 4.7%, or A$687.3mil, writedown across its A$15.5bil property portfolio. — Reuters