Image: Canva.
  • COF assets increased to 23 properties
  • Book value $2.322 billion
  • Occupancy 94.3%

Centuria Office REIT (ASX: COF) is the latest to release its half-year report, the company said it “… has leveraged positive tailwinds in Australia’s metropolitan and near-city office markets to deliver strong interim results for the first half of the 2022 financial year.”

Improving office conditions seems to be the reason behind the positivity, in Dexus’ Australian Real Estate Quarterly Review Q1 2022, the report found business confidence was positive in December, along with professional job advertisements on the rise. White collar employment was also growing.

Centuria’s Grant Nichols confirmed the strong conditions for the market:

“In recent months, Australia has benefited from an uptick in white collar employment with the national unemployment rate at its lowest level in 13 years. This improvement in employment levels has translated into stronger tenant demand for office accommodation across Australia.”

Grant Nichols, COF Fund Manager and Centuria’s Head of Office

With Omicron adding tension to the air, COF benefits from a young portfolio with an average building age of 16 years.

“Increasingly, tenant demand is gravitating towards new-generation buildings that provide better COVID-safe work environments, efficient floorplates, improved amenity and competitively-priced accommodation. There is also increased demand to be located in areas that provide short commutes to improve employee satisfaction and attract the best talent, said Mr Nichols.

The company’s portfolio has now increased to 23 office assets, worth $2.3 billion. In HY21 the total number of assets was 22.

Portfolio occupancy has increased to 94.3% from 93.1% in June 2021, and WALE was maintained at 4.3 years.

The company also reported a $28.5 million valuation uplift, increasing NTA to $2.49 per unit.

Earnings HY22 HY21
Statutory profit $m 63.6 21.5
FFO $m 54.7 57.7
FFO per unit cpu 9.78 11.21
Distributions per unit cpu 8.3 8.25
Return on equity % 8.7 2
Portfolio snapshot HY22 HY21
Number of assets 23 22
Book value $m 2,322.0 2,014.3
WACR % 5.65 5.81
Occupancy by area % 94.3 93.1
WALE by gross income years 4.3 4.3
Leases agreed by area sqm 18,670 52,077
Average NABERS energy rating (by value) stars 4.9 4.7
Average NABERS water rating (by value) stars 4.1 3.2
Average building age (by value) years 16.1 16.8
Balance sheet Pro forma HY22 HY22 HY21
Total assets $m 2,394.9 2,398.7 2,068.9
NTA per unit $ 2.49 2.50 2.48
Gearing % 33.1 31.1 33.5
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