{"id":30562,"date":"2023-05-02T06:51:54","date_gmt":"2023-05-02T06:51:54","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/australian-landlords-push-back\/"},"modified":"2023-05-02T07:08:21","modified_gmt":"2023-05-02T07:08:21","slug":"australian-landlords-push-back","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/australian-landlords-push-back\/","title":{"rendered":"Australian landlords push back on property valuation doomsday"},"content":{"rendered":"

By Lewis Jackson<\/p>\n

SYDNEY (Reuters) – Australia’s biggest landlords and developers played down concerns about inflated commercial property valuations at a conference on Tuesday, while acknowledging economic uncertainty was making investors and renters more cautious.<\/p>\n

Commercial real estate prices are a major concern for investors globally as public markets price the impact of a slowing economy and the growth of remote work, while owners, especially unlisted players, resist major changes.<\/p>\n

At the Macquarie Australia Conference on Friday, the country’s largest office landlord, Dexus, said market pricing implying a 20% to 25% downgrade in asset values was excessive. Premium buildings coupled with signs workers were returning to offices should help protect the portfolio, said chief investment officer Ross Du Vernet.<\/p>\n

“It doesn’t really make a lot of sense,” Du Vernet said at the Macquarie Australia Conference in Sydney.<\/p>\n

Dexus has two Sydney central business district sites on the auction block, widely seen as bellwether transactions for how bad the valuation crunch will be. Du Vernet declined to provide a price guide.<\/p>\n

Public investors have shunned Australian real estate investment trusts, and the benchmark S&P\/ASX 200 A-REIT index remains 21% off a late 2021 peak despite a rally last month.<\/p>\n

High-quality assets as a bulwark against big downgrades was a theme for Russell Proutt, chief financial officer at Charter Hall, which manages A$88 billion and splits the bulk of its property portfolio between office and industrial properties.<\/p>\n

“We think our valuations should be, not impervious, but relatively stable compared to some of the more significant fluctuations we think you’ll see,” Proutt said.<\/p>\n

Although data shows occupancy rates remain high, questions from the packed audience asked how much floor space clients would seek when contracts come up for renewal.<\/p>\n

That question was making large leases harder to lock in years ahead of time, Du Vernet said.<\/p>\n

“There’s still a lot of uncertainty as businesses sort of grapple with their requirements… I think it is going to be different from pre-COVID, customers are going to be much more cautious,” he said.<\/p>\n

There have been no “massive cutbacks” for Charter Hall, Proutt said.<\/p>\n

\n

(Reporting by Lewis Jackson. Editing by Gerry Doyle)<\/p>\n

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