Centuria Office REIT has completed $405 million of debt refinancing, and obtained external valuations on 14 of its 22 properties as at 30 June 2021, resulting in a $16.3 million increase.
The debt refinancing increased the REIT’s weighted average debt maturity from 2.3 years to 4.3 years with no debt expiring until June 2024. Despite the increased tenure, COF maintained a competitive c.2.4% all-in cost of debt across a diversified pool of five lenders. The new debt facilities terms include debt covenants of a 50% loan to value ratio and 2.0x interest cover ratio, which are the same as the existing debt facilities.
Grant Nichols, COF Fund Manager, said “We are pleased to announce this significant refinance of COF’s debt facilities. With sufficient undrawn debt, a very competitive all-in cost of debt, significant debt covenant headroom and diversified debt maturity profile to five quality lenders, COF continues to be well placed with a robust capital structure.”
COF externally revalued 14 of its 22 properties as at 30 June 2021, resulting in a like for like increase of $16.3 million due to positive leasing outcomes and some capitalisation rate compression. COF’s $2.0 billion portfolio now has a weighted average capitalisation of 5.81%. Valuation uplift equates to a c.3 cent per unit increase in net tangible assets.
Grant Nichols, commented, “Transactional activity through 2021 demonstrated strong investment demand and confidence in the Australian office market. This was particularly evident in metropolitan markets, with investors attracted to the relative affordability and quality tenants these markets can attract.
“With improving leasing conditions evident across Australian office markets, COF is well positioned with a diversified portfolio of quality, accessible, and affordable accommodation solutions, which will remain attractive to tenants into the future.”
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