CIP completed external valuations on 28 investment properties, representing c.55% of its portfolio by value as at 31 December 2022. The remaining properties were subject to internal or Directors’ valuations.
CIP’s portfolio Weighted Average Capitalisation Rate (WACR) increased 47bps to 4.66%. Its portfolio value reduced $72 million or -1.9% from 30 June 2022 book values.
The reduced value concentrated on two ultra-long WALE assets.
The remainder of CIP’s active portfolio remained materially unchanged with portfolio leasing and rental growth offsetting capitalisation rate expansion.
With interest rates moving higher, it is expected that other industrial assets will experience softening cap rates and lower values. Many in the industry hope that rising rents will offset the gains and for short WALE portfolios future rental increases can be captured in re-valuations, however reversionary rents on long WALE assets (which were popular among all REITS) are less likely to be captured in re-valuations.
Further details on property valuations will be available in CIP’s half year 2023 results expected to be released on 31 January 2023.
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