Sydney-based Dexus, Australia's Largest Office Landlord, Eyes $2 Billion Divestment
Amidst global geopolitical uncertainties, Dexus, Australia's leading office landlord, is positioning the country as a secure haven for investors. The company aims to divest $2 billion in assets over the next three years amidst a softening commercial property market.
Having completed a quarter of its divestment plan, Dexus reported a 13.9% decline in adjusted funds from operations (AFFO) for the six months ended December 31, 2022. Elevated interest rates and incentive strategies to attract tenants contributed to the earnings drop.
However, Dexus anticipates rate cuts and stabilizing office demand to mitigate the earnings downturn. "The investment market is nearing its bottom," stated Dexus CEO Ross Du Vernet. "Investors have been hesitant in recent years, but rate cycle stability will be a key factor."
Du Vernet believes Australia's diversified economy, stable government, and geographical remoteness will attract both international and domestic M&A activity. "Amidst global uncertainty, Australia offers stability and resilience," he noted.
Shares of Dexus experienced a modest decline of 0.8% in mid-session trading. Despite the decline in AFFO, the company reported a profit of $10.3 million for the half year, reversing a prior loss, due to lower fair valuation impairments.
Dexus declared an interim distribution of 19 Australian cents per security and maintained its full-year AFFO guidance at 44.5-45.5 Australian cents per share, down from 48 cents in the previous year.