Centuria Industrial upgrades guidance

8 February 2024

Market conditions reflect positive headwinds for industrial real estate, with record leases supporting the FY24 earnings upgrade of 20 basis points to 17.2 cents per unit for Centuria Industrial (ASX:CIP).

The Group expressed confidence in the current conditions, with a development pipeline estimated at $1.0 billion to ensure momentum. During the period, Centuria Industrial also delivered $285 million of industrial developments across Australia.

The financials showed a statutory profit of $12.2 million, with strong leasing activity during the period. The Group maintains a portfolio of 88 high-quality assets with a strong portfolio of WALE of 7.5 years complemented by a high 97.2% portfolio occupancy.

Jesse Curtis, CIP Fund Manager and Centuria Head of Industrial, said, “CIP enters the second half of FY24 in a strong position, having executed outsized re-leasing spreads and identified a realisable development pipeline.

“Looking ahead, domestic urban infill industrial market vacancy remains tight despite wider industrial market vacancy marginally increasing. Tenant demand continues to be skewed towards urban infill markets as industrial users prioritise proximity to a large population base. With limited new supply within these infill markets, rental growth is expected to be prolonged, providing the opportunity for continued positive rental reversion. Additionally, CIP’s embedded development pipeline provides the optionality to unlock further value to take advantage of the mismatch between supply and demand and deliver value to unitholders.”