Office property values in Australia have plunged more than 10 per cent in the last six months and could fall further as high interest rates and the work from home trend take their toll on demand.
“We note that Dexus’ office values fell by 11 per cent during the past six months,” he said in a note to clients. “We expect tenant demand to slowly improve while new supply will be limited, which bodes well for the medium term.”Atkins said Mirvac’s exposure to current weak conditions will be cushioned by its towers’ having high occupancy levels, around 95 per cent, and relatively long average lease terms of 5.7 years.
Mitsui Fudosan Australia has taken a 66 per cent stake in Mirvac’s planned office building at 55 Pitt Street in Sydney, but the company did not confirm a start date for the 55-storey tower or if law firm MinterEllison will be a tenant.Mirvac chief executive Campbell Hannan said the group has delivered on its $1 billion asset sales target, adding further details will be released with its full-year results in August.One of those was Sydney’s 5 Martin Place which is half-owned by Cbus Property.
Newly appointed chief executive Ross Lees said the decrease in the draft external valuations is expected to result in a reduction of 25¢ per share to the group’s net tangible assets.
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Source: FinancialReview - 🏆 2. / 90 Read more »