Office REITs, Dexus, DXS
Interesting commentary coming out of New York, adds support to our office note from last week.
Recall that NY city has been one of the “hardest hit”, for office space vacancies. Now we are hearing that return-to-office has hit 70% (i.e., office visitations as a % of 2019 level).
This is definitely good news, if you have any opportunistic office-centric REIT plays on in the portfolio (for us, Dexus, and perhaps less directly, Lendlease).
We’ve talked before about office-to-apartment conversions. They weren’t much of a thing in 2021-2022, but started to become meaningful in 2023 and that is slated to continue (based on submitted plans) into 2024.
Given that OTA’s were meant be difficult (due to regulation and engineering issues) the fact that it is happening is also good news (human ingenuity for the win).
None of this cures offices’ ills overnight, but it all helps, and given that office and office adjacent businesses like DXS, CHC, LLC have been sold off very heavily, it is taken constructively as a result.
Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.
This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.
Please note that past performance is not a reliable indicator of future performance.
General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.
Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.