Centuria Charter Hall
Centuria and Charter Hall FY21 results are in. Image – various.
  • ASX-listed REITs are becoming better known to investors
  • In the property boom, how are REITs performing?
  • We look at two that announced results yesterday

One of the eternal investing questions is – property or stocks?

If you are a fan of the former – and the evidence is you may be as you are reading this – then earlier this year, we asked the supplementary question: could real estate investment trusts (REITs) outpace the property market itself in 2021?

With various ASX- listed REITs announcing their full FY21 results, it is time to consider how these investment comparisons are shaping up.

Centuria Industrial REIT

Billed as Australia’s “largest pure-play industrial” REIT, Centuria Industrial (ASX: CIP) announced its results yesterday.

The highlights:

  • $611 million statutory profit
  • $91 million funds from operation (FFO)
  • 17 cents dividend per unit (in line with upgraded guidance)
  • $3.83 net tangible assets per unit, +36% in the year
  • 41.8% return on equity (12-month)

The trust has 62 industrial assets in its portfolio, whose value is now $2.9 billion, a +57% uplift in the year, with a 96.9% occupancy.

“The domestic industrial market has continued to strengthen with strong tailwinds from increased adoption of e-commerce as well as demand from tenants onshoring operations.

“With record low vacancy rates across all major markets, Australia’s industrial real estate sector remains a highly sought-after market attracting investment demand and creating robust competition for quality industrial and logistics assets.”

Jesse Curtis, CIP Fund Manager

Charter Hall Long WALE REIT

On the same day, Charter Hall Long WALE (ASX: CLW) announced its results. The REIT invests in real estate assets that are predominantly leased to corporate and government tenants on long term leases.

Highlcenturiaights:

  • $618 million statutory profit
  • $159 million operating earnings
  • 29.2 cents dividend per unit (up 3.2%)
  • $5.22 net tangible assets per unit, +12% in the year
  • $652 million equity raised

The trust made $1.4 billion of property transactions, with a total portfolio (468 properties) now worth $5.6 billion, a +180% increase over the year, with 98.3% occupancy.

“CLW provides security and continuity of income with a WALE of 13.2 years and 48% of leases that are NNN (triple net lease). These characteristics provide the REIT’s income and distributions significant insulation from market shocks.

“The 16.8% growth in NTA (net tangible assets) and 3.2% increase in distributions over the year demonstrates the resilience and attractive nature of our portfolio and the security of income it provides.”

Avi Anger, Charter Hall Long WALE REIT Fund Manager

Comparison

A bald comparison between the Australian residential property market and these two stock prices reveals the following:

  • Residential Property prices (cities): +15.1%
  • Residential Property prices (regions): +19.6%
  • Centuria Industrial REIT: + 17.9%
  • Charter Hall Long WALE REIT: +7.0%

Sources: property prices from CoreLogic; share prices from ASX: for past 12 months.

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