Two Commonwealth Bank-managed property trusts have shaved more than $500m off the value of their real estate assets and are bracing for further price declines.
According to the Commonwealth Property Office Fund, the value of 16 office buildings had been reduced by 9.5%, or $195.6m, in the three months to 30 June. The 16 properties account for 63% of its portfolio and revaluations take the value of the fund's properties to $1.857bn and total gross assets to about $3bn.
Office fund manager Charles Moore said much of the loss was linked to Sydney office towers at 225 George Street, of which it owns 25%, and 259 George Street. More than $70m has been taken off the book values.
The properties were both valued down by more than 10%, taking new book values by ownership to $250m and $337m respectively.