brisbane skyscraper sky
Centuria’s average building age is only 16.4 years. Photo: Carles Rabada, Unsplash
  • HY21 show there was a 96.7 per cent average rent collection for July-December 2020
  • 28,306 sqm of lease activity secured across 31 transactions
  • 16.4-year average building age

Publicly-listed Centuria Office REIT (ASX: COF) has released its half-year results from July-December 2021 which has shown high levels of leasing activity coupled with strong rent collection.

The company said its diversified exposure across Australian office markets – with the notable exception of Sydney, which has endured weak domestic tenant demand – has allowed the company to have strong results.

During the HY21, Centuria secured 28,306 sqm of leasing activity across 31 transactions, equalling to 9.3 per cent of their portfolio.

Despite COVID-19, Centuria managed to have an average rental collection of 96.7 per cent. The company credits this to high-quality tenants along with their in-house asset management team.

Grant Nichols, Centuria’s Fund Manager, is pleased with the results he describes as ‘solid’.

“While working from home is still topical, we understand many workers want to be back in an office environment but not endure time consuming daily commutes, which compromise their work-life balance. Equally, many businesses, especially those affected by the pandemic, are conscious of cashflow and are actively seeking more affordable rents,” said Mr Nichols.

“These complementing themes highlight the desirability of decentralised office markets and support COF’s robust half year performance, evidenced by its significant leasing activity and continuously strong rent collection.”

Centuria also believes their relatively young portfolio – the average building age is only 16.4 years – attracts tenants to their portfolio.

“Younger assets enable better adaptability to the current pandemic work environment, such as social distancing considerations. Younger stock also limits overall capital expenditure and maintenance requirements, while lending itself to greener infrastructure.”

80 per cent of their portfolio is from multinational, listed and government tenants. Despite this. no single tenancy represents more than seven per cent of portfolio income.

The state allocation is also geographically diversified; no state is greater holds than 26 per cent of their portfolio.

In conclusion, Mr Nichols is still optimistic Centuria will continue to see strong activity.

“In the past quarter, as we have witnessed the pandemic’s effects starting to unwind, we have also experienced tenants becoming more engaged, resulting in increased leasing enquiry across our portfolio.”

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