Centuria REIT Enjoys 9.6% valuation gain

17 December 2021

Centuria Industrial REIT has booked a 9.6% like for lie valuation gain taking its portfolio to $3.8bn. The uplift of $281m reflects a firming weighted average cap rate of 4.2%.

The results come from external valuations on 66 investment properties, representing c.86% of portfolio value as at 31 December 2021.

Jesse Curtis, CIP Fund Manager and Centuria Head of Industrial, commented, “CIP has achieved a strong valuation uplift throughout the past six months largely due to positive leasing activity across the portfolio, demonstrating our active approach to leasing. Tenancy demand continued to be driven by ecommerce growth and infrastructure investment across all major domestic markets during the 2021 calendar year.

“During the period, the Australian industrial real estate market has continued to strengthen through capital value growth and yield compression. Sector tailwinds have attracted a significant wave of capital seeking to increase exposure to industrial assets. Investment activity, coupled with record low vacancy and robust tenant demand, is likely to drive strong rental growth resulting in continued appreciation of industrial asset values.”

Key valuation movements include:

AssetValuation Dec-21$ value increase% value increaseCap Rate CompressionCap Rate Dec-21
12 Williamson Road, Ingleburn, NSW$74.5m+$26.5m+55%125bps3.50%
23 Selkis Road, Bibra Lake, WA$30.3m+$8.5m+39%125bps5.00%
32-54 Kaurna Avenue, Edinburgh SA$25.0m+$6.0m+32%150bps4.75%
Telstra Data Centre Complex, Clayton VIC$560.0m+$55.0m+11%25bps3.13%
310 Spearwood Avenue, Bibra Lake WA$75.0m+$13.2m+21%50bps5.75%