This article is from the Australian Property Journal archive
THE strong Sydney and Melbourne office markets have delivered a $660 million portfolio valuation uplift for Dexus.
The 5.3% increase followed external valuations on 96 of its 103 assets, including 44 office and 52 industrial properties.
“The strength of the fundamentals in the Sydney and Melbourne office markets combined with solid transactional evidence across both the office and industrial asset classes has seen a strong uplift in values across our portfolio over the past six months,” chief executive officer Darren Steinberg said, highlighting increases in market rents and further capitalisation rate compression in both markets.
“Pleasingly our property values in Brisbane have also benefited from leasing success and values in Perth have stabilised,” he added.
The total portfolio’s weighted average cap rate has tightened by 29 basis points to 5.66% since June 30. The office portfolio’s WACR has come in by 28 bps to 5.50%, and the industrial portfolio by 23 bps to 6.65%.
Cap rate tightening of 50 bps at both 45 Clarence Street and 383-385 Kent Street in Sydney saw respective valuation uplifts of $55 million and $76 million. The under-construction 100 Mount Street in North Sydney had its value increase by around $36 million after a 75 bps cap rate firming to 5.25%, following NBN Co’s decision to commit to 48%, or around 20,364 sqm, of the 35-storey tower for its new Sydney headquarters.
Earlier this month, Dexus reportedly acquired the Christie Offices building in North Sydney’s 56 Berry Street for circa $60 million, which is positioned adjacent to its 22-level A-grade office tower at 201 Miller Street.
Dexus recorded 58,788 sqm of office leases across its office portfolio in the September quarter, and 43,114 sqm of industrial space.
Leasing deals at recently completed developments, including at Greystanes and Laverton, as well as cap rate firming in the prime south Sydney market underpinned its industrial portfolio uplift.
Australian Property Journal
