This article is from the Australian Property Journal archive
THE DEXUS Property Group managed AXA Wholesale Australian Property Fund has reported a fall in the value of its Australian and New Zealand portfolio.
AXA said the significant shift in capitalisation rates has resulted in valuation declines despite the portfolio maintaining a healthy 99% occupancy rate.
The fund had revalued seven properties which represent 41% of its direct property portfolio and recorded a $19.7 million fall across three assets in Australia and $NZ10 million decline over NZ four properties as at July 31.
In Australia, an industrial property at 105-111 Vanessa Street, Kingsgrove New South Wales was revalued at $65 million down from the previous valuation of $74 million. The cap rate shifted 100 basis points from 6.25% to 7.25%.
In addition, two offices at 124 Walker Street, North Sydney and 441 St Kilda Road, Melbourne were revalued $73.6 million and $64 million respectively down from $82.8 million and $65.5 million respectively.
The cap rates in 124 Walker Street shifted 100 basis points from 6.25% to 7.25% and 441 St Kilda Road saw a 25 points change from 7.25% to %7.50%.
In NZ, one asset actually recorded an increase in value. An office building at 41 Shortland Street, Auckland increased from $NZ68 million to $NZ69 million and cap rates rose from 7.50% to 8.25%.
Meanwhile two bank tenanted offices in Wellington were revalued, 215 Lambton Quay otherwise known as ANZ Tower fell from $NZ46.5 million to $NZ43.5 million and cap rates expanded from 6.75% to 7.75% whilst Westpac House at 318 Lambton Quay fell from $NZ39 million to $NZ36.5 million and cap rates shifted 100 basis points from 6.88% to 7.88%.
Only one retail asset was revalued in The Plaza Shopping Centre in Whanhaparaoa and it slipped from $NZ53.5 million to $NZ48 million – booking the heaviest fall across the portfolio. Cap rates expanded from 7% to 7.75%.
AXA said these properties were acquired during the latter part of 2007 when capitalisation rates applied to direct property assets were noticeably lower than those adopted in current market conditions.
“The significant shift in capitalisation rates in Australia and NZ has resulted in valuation declines,” it added.
AXA said its direct property portfolio remains strong and is underpinned by strong rental growth and occupancy rates of 99%.
Earlier last month, the AXA Wholesale Australian Diversified Property Securities Fund underperformed the benchmark S&P/ASX 300 Property Trusts Accumulation Index.
The securities fund booked a total return of -16.2% over the three months to June 30 2008 and over the 12 months returns were -36.1%.
The fund said detractors included non-benchmark stock Australand, diversified trust MIrvac and retails trust APN/UKA Europe. Contributors included industrial trust Goodman, non benchmark stock Trinity and commercial office trust Tishman Speyer.
Australian Property Journal
