Centuria REITS cap off transformational year


Centuria’s two listed real estate trusts, Centuria Metropolitan REIT (ASX: CMA) and Centuria Industrial REIT (ASX: CIP), has announced strong half-yearly results for the period to 31st December 2017; the result of six months of successful transactional activity, leasing and portfolio re-alignment.

Most importantly, this activity has ensured our listed entities continue to deliver predictable and reliable returns to our investors. Distributable earnings improved to $19.9 million and $24.2 million for CMA and CIP respectively, with distribution guidance reaffirmed for both entities.

The results come one week ahead of Centuria Capital Group’s (ASX: CNI) half year results announcement on Thursday 15 February by group CEO John McBain.

CMA half-year highlights

Financial highlights

  • Statutory net profit of $39.2 million
  • Distributable earnings of $19.9 million representing 9.4 cents per security (cps)
  • Quarterly distributions paid during 1H18 totalling 9.05 cps
  • Increased net tangible assets (NTA) to $2.39 per security, up 7 cps or 3.0% from December 2016
  • Disciplined gearing of 29.6%, within target range
  • Inclusion in the S&P/ASX 300 A-REIT index from September 2017
  • Rolling 12-month total return of 20.9% outperforming S&P/ASX 300 A-REIT Index at 6.4%3 as at 31 December

Operating highlights

  • Strong leasing activity with 20 lease transactions across 9,234sqm
  • FY18 lease expiries of 1.2% provide solid earnings visibility for remainder of FY18
  • Increase in portfolio valuations to $899.7 million since 1H17
  • Like-for-like total portfolio increased by $41.6 million, or 7.0%
  • Portfolio weighted average capitalisation rate (WACR) firmed to 6.87% (44bps) from 1H17
  • Strong portfolio weighted average lease expiry (WALE) of 4.3 years
  • Acquisition of four high quality, fully occupied assets totalling $210.9 million
  • Average NABERS energy rating of 3.8

CIP half-year highlights

Financial highlights

  • Statutory net profit of $49.6 million
  • Distributable earnings[1] of $24.2 million representing 10.1 cents per unit (cpu)
  • Distributions of 9.7cpu paid in 1H18
  • Total assets increased 16.7% to $1,075.0 million[2], with NTA increasing by 4.7%[2] to $2.46 per unit
  • Continued to deleverage with gearing reduced to 40.6% (43.1% at Jun-17)
  • $31 million[3] revaluation gain, driven primarily by leasing success

Operating highlights

  • Agreed leases over 159,502sqm; representing 20.8% of portfolio GLA
  • Portfolio occupancy increased to 95.9% (92.1% at Jun-17)[4], with a 4.9 year WALE3
  • Acquisition of 7.7% strategic interest in Propertylink Group[5]
  • Acquisition of four strategic, geographically diversified properties for $78.4 million before transaction costs

Centuria’s listed business has grown from an aspiration just over three years ago, to two significant, market leading S&P ASX 300 Index funds today. Full results in the attached ASX announcements.


[1] Distributable earnings is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash and significant items.  The CPF2L Directors consider that distributable earnings reflect the core earnings of CIP
[2] Since 30 June 2017
[3] Reflects gross increase, does not include capital expenditure incurred since 1 July 2017, excludes Mark to Market movement for PLG securities
[4] By income
[5] Centuria Capital Group (“CNI”) hold a 9.3% interest in PLG. CNI and CIP hold 17% of PLG when viewed in combination

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