That was despite announcing valuation upgrades for its listed managed investment vehicles, which registered marginal falls of 0.6 per cent for HCW and 1.1 per cent for HDN, outperforming the market.
“We had strong valuations across both the entities, which is positive, but that’s obviously being masked by the RBA hike that’s just come out,” Mr Di Pilla said.
“The whole market’s getting pretty bashed around, and anything interest-rate-sensitive in the real estate sector is getting affected as well.
“It’s not a great day to judge the share price when you’ve got the RBA lifting rates by 50 points, which was on the outer edge of market expectations.”
‘Significant’ consumer response
Mr Di Pilla said the interest rate rise, designed to curb inflation, was probably overdue.
“I think inflation’s just been bubbling away and they’ve been slow to react, so catching the market a little bit on the hop with a bigger rise today than expected might actually dampen some of the remaining demand pressures.
“The consumer response would be significant I would have thought.”
HCW recorded a valuation gain of $25 million, a 4.1 per cent increase in five months, while the value of HDN’s properties rose 4.6 per cent, or $209 million, over the same period.
He said all three businesses were well-positioned for a higher interest rate environment, supported by strong underlying demand drivers.
“You’ve just got to grind it out, grind it out in an environment like this,” Mr Di Pilla said.
“A lot of REITs look pretty good in a falling interest rate and falling cap rate environment without having to do much.
“But where you’ve got an increasing interest rate environment you’ve really got to have underlying demand from your tenants to reinvest, to grow, to develop and you’ve also got to, most importantly, collect your rent and keep the occupancy up.”
