Centuria increases stake in strongly performing real estate finance business

10 April 2024

Centuria Capital Group (ASX: CNI or “Centuria”) is pleased to announce it has increased its interest in Centuria Bass Credit Pty Ltd (“Centuria Bass”) to 80% for a consideration of $57 million plus adjustment for NTA.

The incremental stake was funded via $28.5 million of cash and $28.5 million in CNI scrip, with the CNI scrip issued at $1.775 per security comprising a total issuance of 16,056,337 CNI securities.

Taking into account the consideration for the purchase of the initial 50% in 2021, CNI’s 80% interest has been acquired for a sum of $81 million representing an approximate earnings multiple of 4 times based on annualised earnings to date in FY24.

John McBain, Centuria Capital Group Joint CEO said, “Today’s announcement follows an ongoing review of opportunities to meaningfully scale Centuria’s platform. Expanding our stake in Centuria Bass Credit increases alignment and earnings-share to a market leading real estate finance business, capable of generating healthy profit accretion for Centuria’s future earnings profile”.

“We retain high conviction over this asset class and are focused on broadening the range of real estate debt offerings to our investor network. Centuria’s investor network have developed a rapidly increasing appetite for the relatively competitive returns and short duration these funds exhibit.”

Centuria Bass Real Estate Finance

Centuria Bass has grown meaningfully since its formation. On acquisition the Centuria Bass AUM was $0.3 billion, which has grown to $1.7 billion currently. Centuria Bass generated an interim operating profit of $7.2 million for CNI as at 31 December 2023 based on the 50% interest held at that time.

Centuria Bass is positioned to increase its non-bank lending market share with new real estate finance investment products that complement Centuria’s distribution platform. Since 31 December 2023, Centuria Bass has further increased its AUM to $1.7 billion, and a substantial pipeline of potential opportunities exists.

Centuria Bass continues to be led by a deeply experienced management team, including founding partners – former UBS European Head of Leveraged Finance and Debt Capital Markets, Giles Borten, and former Managing Director of Wingate and Gresham Partners, Nicholas Goh. Centuria Bass’ broader team now numbers 40 staff who are fully integrated in Centuria’s offices and operations.

Key Centuria executives have been active in the Centuria Bass business. Since the acquisition of the initial stake in 2021 both Centuria Joint CEO’s have served on the Centuria Bass board and Centuria’s CFO and Group Treasurer both sit on the Centuria Bass Investment Committee.

CNI re-affirms FY24 OEPS guidance of 11.5-12.0cps and FY24 DPS guidance of 10.0cps.