- FFO was up 22% pcp
- Portfolio expanded to 88 assets
- 8.3 year WALE with 98.8% portfolio occupancy
Earlier this week Centuria’s office fund, Centuria Office REIT (ASX: COF) announced its full-year results, with FY22 recording a 50 per cent profit jump.
Centuria Industrial REIT (ASX: CIP) has now released its FY22 results, with the company announcing $367.5 million statutory net profit, $111.7 million funds from operations, and $4.24 per unit NTA.
| Earnings | FY22 | FY21 | |
| Statutory profit / (loss) | $ million | 367.5 | 611.2 |
| FFO | $ million | 111.7 | 91.4 |
| FFO per unit | cpu | 18.2 | 17.6 |
| Distribution per unit | cpu | 17.3 | 17.0 |
| Return on equity | % | 15.2 | 41.8 |
Jesse Curtis, CIP Fund Manager and Centuria Head of Industrial, said, “During the period, Australia reported one of the lowest industrial vacancy rates in the world (0.8%), driven by occupier demand outstripping supply. Subsequently, CIP benefitted from significant market rental growth, achieving releasing spreads of 11% over prior passing rents.
“Furthermore, with circa 30% of CIP’s leases expiring prior to FY26, the REIT is well placed to take advantage of sustained demand and benefit from continued forecast rental growth.
“In particular, 85% of the portfolio is positioned within supply-constrained urban, infill markets, which are high-demand areas for e-commerce and logistics operators, providing last-mile access to densely populated areas.”
Funds from operations moved up 22% pcp, with NTA also moving up 11%.
| Balance Sheet | 30 June 2022 | 30 June 2021 | |
| Total Assets | $ million | 4,148.0 | 3,105.9 |
| NTA per unit | $ | 4.24 | 3.83 |
| Gearing | % | 33.2 | 27.8 |
A diverse blue-chip tenant base supported Centuria’s portfolio. Approximately 56% of the REIT’s income is derived from its top 20 customers, who are high-quality household names. Additionally, 20% of portfolio income is linked to CPI reviews.
During FY22, CIP’s portfolio occupancy increased to circa 99% and weighted average lease expiry (WALE) was 8.3-years.
Centuria Industrial’s valuations gain of $326 million also benefitted from strong leasing activity, an 11% increase on FY21. The portfolio Weighted Average Capitalisation Rate (WACR) compressed to 4.19% during FY22.
| Portfolio Snapshot | 30 June 2022 | 30 June 2021 | |
| Number of assets | 88 | 62 | |
| Book value | $ million | 4,101 | 2,945.1 |
| WACR | % | 4.19 | 4.54 |
| Occupancy by income | % | 98.8 | 96.9 |
| WALE by income | years | 8.3 | 9.6 |
| Leases agreed GLA | sqm | 185,206 | 239,950 |
CIP also grew its portfolio by 42%, the company had 62 assets in FY21, CIP now has 88 assets worth a total of $4.1 billion.
Expansion was supported by $765 million worth of acquisitions including 23 high-quality assets and three development sites, the latter providing a circa $155 million end value and circa 60,000 square metres of new A-Grade industrial space.
Mr Curtis continued, “FY22 was a year of significant transactions with a focus on short WALE assets, value-add projects and development acquisitions re-risking the portfolio to capture positive rent reversions while divestment of non-core assets recycled capital into higher yielding opportunities.
“CIP’s development sites aim to help meet market demand for high-quality industrial space and we are able to leverage Centuria’s inhouse development capabilities to execute on several value-add and development projects.
“Additionally, CIP continues to build scale through land consolidation strategies within key urban submarkets.”
During FY22, CIP expanded its Wetherill Park NSW submarket landholding with three acquisitions, consolidating 5.3 hectares. In Derrimut VIC, CIP acquired an additional five assets increasing its submarket landholding to 25 hectares with a total of 10 assets.
