News: COF UPDATE 1-Australia's Centuria Office REIT portfolio valuations dip 5.6%

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Jan 12 (Reuters) - Australia's Centuria Office REIT (COF) said on Friday the book value of its portfolio as at the end of first half of fiscal 2024 fell 5.6% amid a slowdown in the country's office and retail real estate market.

The commercial real estate sector in Australia, particularly office and retail, is reeling under headwinds including a shortfall in demand owing to hybrid working arrangements, rising interest rates lowering portfolio valuations for companies alike, and a slowing economy.

External valuations on 12 of Centuria Office's 22 investment properties as at end of December reflected a like-for-like decrease of about A$124 million ($83.01 million) on prior book values, a portfolio decline of about 5.6%, the company said.

This drop follows a 4.4% fall in portfolio valuation posted by the Sydney-based office real estate investment trust as of June, indicating continued pressure to write down portfolio amid property sector woes.

Centuria's weighted average capitalization rate - a metric to measure return on investment of real estate assets - across its portfolio rose to 6.26% from 6.00%, as at Dec. 31. ($1 = 1.4939 Australian dollars)