The damage from devaluations has been worst in the office sector, where weak CBD demand and the work from home trend means scant rental growth to offset values.
A wave of write-downs is in full swing across the commercial property sector – office landlord Dexus alone took a $1.2 billion hit to its portfolio – as soaring interest rates tear through landlords’ bottom lines, with further falls expected.
– said the property market was only “halfway through a challenging period” as inflation, higher interest rates and geopolitical risks weigh on capital flows and market sentiment.Chief among the drags is the rising interest rate cycle, which has spurred investors Dexus – which has 70 per cent of its balance sheet holdings nailed to the office sector – posted a full-year statutory net loss after tax of $752.7 million,Mirvac booked a loss and Vicinity recorded a reduced profit after taking in portfolio losses.
“As those low interest rates came into play, people were looking for any form of income and they bid real assets, particularly real estate, down to very low total returns.
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