Why it matters: This reckoning in commercial property has been coming for months as interest rates rise, pushing up returns expected by investors.
Context: The office sector is particularly vulnerable as many workers continue to work from home.
What next: This writedown cycle may take several revaluation rounds to play out.
ASX-listed Dexus, one of the country’s largest office tower owners, has wiped $1 billion from the value of its diversified portfolio as rising rates exact a toll on the commercial property sector.
The devaluation has stripped 6 per cent in six months from the worth of the commercial real estate that Dexus holds on its balance sheet, which was recorded as $17.8 billion at its half-year result in February.
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Nick Lenaghan edits the property section, which covers all aspects, from residential real estate and housing and construction to commercial property – office, retail, industrial – and major ASX-listed developers and real estate investment trusts. Connect with Nick on Twitter. Email Nick at nlenaghan@afr.com
