Real estate investment trust Macquarie CountryWide Trust and Becton Property Group have both separately announced their half-year end property revaluation results, with each recording downward valuations.
Macquarie CW’s entire portfolio was valued to $5.4 billion at December 31, 2008, a decline of 10 per cent from its most recent book value of $6 billion.
Independent valuations were undertaken on 167 of the portfolio’s properties, which accounts for 57 per cent of the portfolio’s value.
Macquarie CW’s chief executive Steven Sewell said movement in the portfolio’s value resulted from “a 1.4 per cent increase attributable to income growth and a decrease of 11.4 per cent attributable to softer capitalisation rates”. He added that their properties were still recording “solid underlying performance” despite the difficult market conditions.
Macquarie CW said the Trust is complying with its “trust level debt and derivative covenants”.
Meanwhile, Becton recorded non-cash impairment charges of approximately $65.2 million for the half-year ending December 31, 2008. This included a net reduction in property fund investment assets of approximately $26.6 million, relating to the group’s investment the Becton Diversified Property Fund (BDPF).
Becton’s non-cash impairment is also attributed to the sale of three development assets for an aggregate of approximately $14.3 million below book value. Becton further acknowledged a “mark-to-market impairment” of their interest rate swap portfolio of around $24.3 million.
BDPF’s investments in a number of managed funds have been affected by unit price reductions following asset revaluations averaging 16.5 per cent. Becton said the average capitalisation rate across the entire portfolio increased to 8.1 per cent at the end of December, up from 7.4 per cent mid-year.
Becton sold several non-core properties in the second half of last year in its effort to reduce debt and simplify the business.
