Centuria Metro Office Quarterly Update

29 October 2019

Centuria provide an updated of the progress for Q1 FY20 for its Metropolitan REIT this week.


Key Highlights

  • Terms agreed for 8,168 sqm of leasing (3.0% of portfolio NLA) across nine separate deals
  • High occupancy maintained at 99.0%, WALE3 at 4.8 years
  • Assets under management (AUM) expanded to $1.8 billion
  • Entered into agreements to acquire interests in two A-grade office properties in fringe CBD locations across Sydney and Perth for a total purchase price of $380.5 million
  • An oversubscribed equity raising for approximately $273 million


Grant Nichols, CMA Fund Manager, commented, “8 Central Avenue and William Square are both A-Grade, fully occupied and provide a combined WALE of 8.1 years. Both assets have excellent tenant covenants including the Australian Commonwealth Government, various state government agencies and the Seven Network. Importantly, we believe the location of these assets will deliver strong ongoing tenant demand, being located near key transport infrastructure and substantial retail amenity. The addition of these institutional grade assets compliment and improve the CMA portfolio, and assist CMA in delivering its primary objective of providing unitholders with predictable and sustainable income streams by investing in quality, well located office buildings”.


Throughout Q1 FY20, terms were agreed or leases completed across 8,168 sqm, representing approximately 3.0% of portfolio NLA. As a result of these transactions, the FY20 lease expiry profile reduces from 8.3% as at 30 June 2019 to approximately 4.7%.


Grant Nichols commented, “CMA’s team remains focused on actively managing the portfolio, which is well positioned with occupancy of 99.0% and a WALE of 4.8 years. Notably, over 70% of the portfolio’s income now expires at or beyond FY23 and just 4.7% of the portfolio’s expiry remains for FY20. The team continues to identify and execute on leasing solutions that complement our tenant requirements.”


CMA confirms its FY20 forecast FFO guidance of 19.0 cents per unit, with distribution guidance of 17.8 cents per unit.