Centuria Industrial 1H19 Results Update

7 February 2019

Centuria Industrial REIT released their 1H 2019 results this week with strong leasing results boosting performance. The REIT is the largest pure income focused industrial REIT in Australian with assets in excess of $1.4bn. Unlike Goodman and Propertylink (ESR) who undertake development activities, Centuria does not, allowing us to understand the real industrial picture without the influence of development risks or profits. The trust did however buy and sell a stake in Propertylink which has influenced some of the numbers. Centuria Industrial hold 41 assets across Australia with a higher exposure to NSW and VIC. Tenant demand across the portfolio has been good with occupancy increase from 94.5% to 97.1% over the last 6 months. Over the past few years Centuria have significantly de-risked the Victorian portfolio which historically held a high vacancy in Victoria. In the last 6 months Centuria have leased up 52,693sqm (80%) of total leasing delivered in 1H19. Centuria revalued 100% of portfolio in September 2018 which provided a like for like revaluation gain of $43.2 million with a cap rate compression of 24bps to 6.52%. Total Property Income for the REIT was up 3.6% on the prior corresponding period to $43.2M, however distributable earnings were down 3.7% due to increase property expenses and the lack of Propertylink income from the previous units held by the Trust. The distribution yield from the trust based on the 31 December closing price was 6.7%, down from 7.6% for the pcp. Centuria refinanced $!50m of debt facilities during the period and was able to extend the weighted average debt maturity to 3.3 yrs and lower the weighted average cost to 3.8%. FY19 guidance remains unchanged with forecast distributions of 18.4 cents per unit and a forecast distribution yield of 6.7%. CIP Trading Chart Source: Investing.com #Centuria