Centuria Industrial REIT Reports Robust FY24 Financial Performance
CIP (CIP) Share Update July 2024 Tuesday 30th
Centuria Industrial REIT Announces Strong FY24 Financial Results
Centuria Industrial REIT (ASX: CIP), Australia's largest domestic pure-play industrial REIT, has released its Full Year financial results for the period ending 30 June 2024, showcasing strong performance and strategic growth.
Instant Summary:
- $109.3 million in Funds From Operations (FFO), up 1% from the previous year.
- 17.2 cents per unit (cpu) FFO, consistent with upgraded FY24 guidance.
- 16.0 cents per distribution unit (dpu), in line with FY24 guidance.
- $3.87 per unit Net Tangible Assets (NTA).
- 6.5% like-for-like Net Operating Income (NOI) growth.
- Strong balance sheet with 34.0% pro forma gearing and 93% debt hedged.
- $120 million in divestments, achieving a 4% average premium to book value.
- 97.1% portfolio occupancy with a 7.6-year WALE.
Financial Performance
Centuria Industrial REIT (CIP) reported a robust financial performance for the fiscal year ending 30 June 2024. The REIT achieved $109.3 million in Funds From Operations (FFO), marking a 1% increase from the previous year. This translates to 17.2 cents per unit (cpu) FFO, aligning with the upgraded FY24 guidance.
Distributions were consistent with expectations, with 16.0 cents per distribution unit (dpu) paid in quarterly installments. The Net Tangible Assets (NTA) per unit stood at $3.87, reflecting the REIT's solid asset base.
Portfolio and Leasing Highlights
CIP's portfolio demonstrated strong leasing activity, with 301,583 sqm of lease terms agreed across 39 transactions, representing 22% of the portfolio's Gross Lettable Area (GLA). The REIT achieved an impressive 43% positive re-leasing spread, significantly higher than the previous years.
Key leasing transactions included AWH extending its lease at Bibra Lake WA and Chairay Sustainable Plastic leasing a warehouse at Canning Vale WA. The portfolio maintained a high occupancy rate of 97.1% and a Weighted Average Lease Expiry (WALE) of 7.6 years.
Strategic Divestments and Acquisitions
During FY24, CIP executed strategic divestments totaling $120 million, achieving an average 4% premium to book value. Notable divestments included properties in Westmeadows VIC and Tullamarine VIC. These sales highlight the strong investment demand for urban infill industrial properties.
CIP also made strategic acquisitions worth $50.5 million, including the Fujitsu Data Centre in Malaga WA and a property in Wetherill Park NSW, expanding its portfolio and enhancing its market position.
Development and Sustainability Initiatives
CIP continued to progress its $1.0 billion development pipeline, focusing on urban infill industrial markets. Completed projects included the M80 Connect in Campbellfield VIC and a dual-unit facility in Canning Vale WA.
The REIT also implemented several ESG initiatives, such as increasing solar capacity and targeting zero scope 2 GHG emissions by 2028. These efforts align with Centuria's broader sustainability framework.
CIP's strong financial performance and strategic initiatives are likely to have a positive impact on its stock price. The consistent FFO and distribution growth, coupled with strategic divestments and acquisitions, demonstrate the REIT's ability to navigate market conditions effectively. The high occupancy rate and positive re-leasing spreads further underscore the portfolio's resilience and potential for future growth.
Investor Reaction:
Analysts are expected to react positively to CIP's robust financial results and strategic growth initiatives. The REIT's ability to achieve strong leasing activity and execute strategic divestments at a premium to book value will likely bolster investor confidence. However, the broader market conditions and interest rate environment will continue to be key factors to monitor.
Conclusion:
Centuria Industrial REIT's strong FY24 financial performance and strategic initiatives position it well for future growth. Investors should consider the REIT's consistent FFO and distribution growth, high occupancy rate, and strategic acquisitions as positive indicators of its market position. Stay informed on CIP's developments and assess the potential long-term impacts on your investment portfolio.