Return to the office: Did this decision help boost ASX 200 property shares today?

Workers in NSW have been given the nod to head back to the office, with Victoria set to follow suit.

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Key points

  • NSW is removing a work-from-home recommendation 
  • Victoria could be lifting work-from-home restrictions and mask mandates in the office next week
  • We take a look at the impact on Dexus Property Group, Mirvac Group and Abacus Property Group  

ASX 200 property shares climbed today amid NSW lifting a recommendation to work from home. Victoria also flagged a removal of a mask mandate for office workers could be imminent.

Three ASX 200 property shares with strong office portfolios include the Dexus Property Group (ASX: DXS), Mirvac Group (ASX: MGR), and Abacus Property Group (ASX: ABP).

The Dexus share price gained 1.23% today, Mirvac climbed 1.16%, while Abacus leapt 0.86%.

Let's take a look at what could be impacting these companies today.

Work-from-home recommendation lifted

In a boost to ASX 200 property shares, the NSW Government announced an easing of COVID-19 restrictions today. The recommendation to work from home will be removed from Friday and it will now be up to the employer to decide where people work. Masks will also no longer be required at the office.

Commenting on the changes, NSW Premier Dominic Perrottet said:

As we continue to move forward out of the pandemic we are ensuring that we keep people safe and people in jobs so life can return to normal as quickly and safely as possible.

In Victoria, health authorities are set to reconsider requiring workers at the office to wear masks, The Age reported. Victorian Premier Daniel Andrews said:

We're confident that we'll be able to get to a situation next Friday where masks are off in the office and the advice changes — people will then be free and, in fact, we'll be encouraging them to go back to the office.

Dexus has an office portfolio of $24.9 billion. This includes 52 properties across the major CBDs including Sydney and Melbourne. Despite a difficult operating environment, Dexus reported a 95% occupancy in its office portfolio in its H1 FY22 results on Tuesday.

The Mirvac Group has $8.1 billion of office assets, with 85% of these in Sydney and Melbourne. Mirvac also has a $3.2 billion retail portfolio, which may benefit from more foot traffic in cities. In its H1 FY22 results last week, this ASX 200 property share said its CBD retail assets remain a major drag on performance but "remain will positioned for resumption of immigration, tourism and return to office".

Finally, Abacus Property Group reported its half-yearly financial results today. The company has a commercial office portfolio worth $1.7 billion, or 36% of its total assets. Its retail portfolio of $485 million represents 11% of its assets.

The company said 96% of office rents were collected during H1 FY22.

ASX 200 property shares recap

The Dexus share price has shed 3.6% year to date, while Mirvac has dived 10.31%. Meanwhile, the Abacus share price has dropped 6.6%.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has fallen 2% year to date.

Dexus has a market capitalisation of $11.5 billion. Mirvac has a $10.3 billion market cap and Abacus is worth $2.9 billion.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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