SYDNEY, July 19 Reuters Australia39;s largest landlords have announced a string of downgrades to the values of their office block portfolios over the past month, but not by enough to humour investors.

While publicly traded commercial real estate markets have plunged, the hit to unit prices has not shown up fully in asset valuations, creating a stalemate between relatively upbeat landlords and buyers waiting for deeper discounts.

Office blocks are at the centre of the standoff. Emptied during COVID, workers have been slow to return to offices, while higher rates have hit property values just as debt gets more expensive to service.

Real estate investment trusts REITs such as Dexus, one of the country39;s largest office owners, Charter Hall Group, and Centuria Office REIT downgraded portfolios between 4 and 8 in biannual independent valuations over June and July.

Added to valuations from December, major REITs, which build, own and operate property assets, have marked down office portfolios by roughly a tenth or less over the past year. Nonoffice assets have fallen even less.

That39;s a fraction of the decline in public markets. Dexus shares have fallen 28 since 2022, while Charter Hall has nearly halved. The Australian REIT benchmark is still a fifth off preCOVID levels despite a 4 rise this year.

While such divergence between public and private valuations isn39;t uncommon due to prime property owners being unwilling to mark holdings down, the yawning gap reflects…