Dexus sells three assets for $383.2m

Dexus has announced that it has unconditionally exchanged contracts to sell three assets for a combined $383.2 million.

The assets include a 50% interest Dexus held in 5 Martin Place, Sydney for $296.2 million, in which its 25% share was $148.1 million, 130 George Street, Parramatta for $69.1 million and 18 Motorway Circuit, Ormeau, for $17.9 million.

Dexus said the sale proceeds will initially be used to repay debt. Dexus said the divestments continue its asset recycling initiatives, with further market updates expected as transactions materialise.

The sale of the assets were reflected in the draft valuations released earlier this month which revealed Dexus' book value dropped some 9% in the last six months, amounting to a loss of around $1.3 billion.

The drop was primarily driven by the office portfolio, which decreased 11.3% on the back of higher capitalisation rates and discount rates.

The industrial portfolio fell by about 1.2%, with Dexus saying strong rental growth largely offset the impact of higher capitalisation and discount rates.

The weighted average capitalisation rate across the total stabilised portfolio sits at 5.87%. The weighted average capitalisation rate of the office portfolio is 6.01% while the industrial portfolio's is 5.45%.

"The investment metrics displayed by recent sale activity support a softening in office market valuations," Dexus chief executive and managing director Ross Du Vernet said.

"However, as a long-term investor, we have confidence in the value of our high-quality portfolio through the cycle.

"There is continued occupier demand for well-located, high-quality buildings as seen in our portfolio occupancy."

Dexus said the valuations will be finalised in time for the group's FY24 results, to be handed down on August 20.