Property giant Dexus back in the black amid | Australian Markets

The boss of property giant Dexus is optimistic in regards to the outlook for metropolis workplace markets as rates of interest fall and employees are ordered back to their desks amid tighter working-from-home privileges.

The feedback from Dexus chief government Ross Du Vernet on Tuesday got here simply hours earlier than the Reserve Financial institution slashed the money fee by 25 foundation factors to 4.1 per cent, trimming borrowing prices for the primary time since late 2020.

Regardless of this, Dexus shares closed down 0.8 per cent to $7.76.

“We’re at a pivotal moment in the real estate market as interest rates shift and the conditions for an office market recovery are emerging,” Mr Du Vernet informed analysts after the company swung to a half-year revenue.

“Markets move in cycles and we are now reaching a turning point for real asset markets. Longer term trends remain sound with demand underpinned by strong population growth.”

Dexus reported a web revenue of $10.3 million within the six months to the top of December, up from a web loss of $597.2m a 12 months in the past on the back of heavy writedowns. Income fell from $480.6m to $434.7m.

It reported a 13.9 per cent fall in adjusted funds from operations (AFFO) — its most popular efficiency metric — to $251.8m, or 23.4¢ per security, blaming larger rates of interest and decrease trading earnings.

The real estate investment trust operates $14.5 billion value of belongings throughout workplace, industrial, healthcare, retail, infrastructure and alternate options, in accordance with its web site. It manages one other $38.9 billion of investments in its funds management business.

The company — value $8.3 billion — stated its workplace portfolio occupancy remained nicely above market average at 93.5 per cent, albeit lowering since final financial 12 months, predominantly as a end result of the Victorian Authorities departing 80 Collins Road in Melbourne.

It’s within the midst of making an attempt to promote $2b value of belongings throughout the 2025-27 financial years in a bid to recalibrate its portfolio as tenants search out central places of work with high amenities.

Ord Minnett analysts stated web absorption of premium workplace space had been constructive on the expense of decrease grades.

“Flight-to-quality is a major theme for office markets as occupiers seek high quality centrally located offices with amenities that appeal to staff,” they stated.

“In the Sydney CBD, there has been a ‘flight to core’ with net absorption in the core of the CBD exceeding the other precincts.”

Barring unexpected circumstances within the full financial 12 months, Mr Du Vernet reiterated its expectation for AFFO of about 44.5¢-45.5¢ per security and distributions of 37¢ per security.