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Aug 16 (Reuters) - Australia's Dexus (DXS) said on Wednesday it expects to face challenges in fiscal 2024, after the real estate firm reported an annual loss.

It anticipates capital flows and market sentiment to continue to be impacted by inflation and higher interest rates, which will put further pressure on the valuations of real assets of the company.

The Sydney-headquartered firm reported statutory net loss attributable of A$752.7 million ($485.72 million) for the year ended June 30, compared with a profit of A$1.62 billion a year earlier.

The hit was due to fair value losses incurred on investment property.

The company also forecast lower distribution of 48 Australian cents per security, compared with current year' total distribution of 51.6 cents.

Its adjusted funds from operations declined more than 3% to A$555 million in fiscal year 2023.

But adjusted funds from operations, excluding trading profits for 2024, are expected to be broadly in line with that delivered in financial year 2023, the company said in a statement.

($1 = 1.5497 Australian dollars)