The update from DXS points to higher rents, and therefore higher carrying values of the underlying properties, across their industrial and office portfolios.
The below picture is slightly blurred, but worth reading/reflecting on. WFH is deadly to office rents. Why go? Unless you can give workers a great working environment, if they can, they’ll zoom. Or teams. Or whatever.
However, if you can (provide good quality office space) it appears the capacity to charge higher rents is there.
Now I am somewhat sceptical that cap rates could have tightened, further, given the move in bond yields, but our point here is that DXS has the newer, higher quality prime grade office space, relative to peers, which is the underlying fundamental thesis, for our exposure, combined with the fairly cheap headline valuation.
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