Centuria Industrial REIT (ASX:CIP) financial year 2020 results & outlook

Interviews

by Rachael Jones

Centuria Industrial REIT (ASX:CIP) Fund Manager, Jesse Curtis talks full year 2020 results, portfolio metrics and guidance.

Rachael Jones: Hello. I'm Rachael Jones for the Finance News Network. Joining me today from Centuria Industrial REIT (ASX:CIP) is Fund Manager Jesse Curtis. Jesse, good to see you again.

Jesse Curtis: Good to see you again, Rachael.

Rachael Jones: Now, Centuria Industrial REIT has had a strong year, and it's on a good footing for financial year 2021. Can you remind us about the fund and its market position?

Jesse Curtis: Sure. Centuria Industrial REIT is Australia's largest pure-play industrial REIT. We have a portfolio of over 50 high-quality industrial and logistics assets, with a quality tenant base paying the underlying rent. The portfolio occupancy is currently 97.8 per cent, and the weighted average lease expiry of the portfolio is 7.2 years. The portfolio strategy is to invest in high-quality industrial assets located in infill markets close to key infrastructure.

Rachael Jones: Thanks Jesse. And can you walk us through CIP's financial year 2020 performance highlights?

Jesse Curtis: I'd love to. This has been a very successful year for Centuria Industrial REIT. We delivered a total unitholder return of 10 per cent, and funds from operation of 18.9 cents per unit and distributions of 18.7 cents per unit. What's impressive is in spite of the Covid-induced slow down, we achieved over 122,000 square metres of terms agreed across the portfolio and increased occupancy from 95 per cent through to 97.8 per cent. We continue to execute on a number of value-add transactions across the portfolio too, enhancing unitholder value and creating long-term secure cash flows.

Rachael Jones: And you've just announced an exciting new portfolio acquisition. What have you bought?

Jesse Curtis: That's correct. We're very excited to announce that we've secured three high-quality industrial assets for a total of nearly $450 million. The major asset we've acquired as part of this is the Telstra data centre in Clayton, Victoria. Telstra is selling the asset on a 30-year lease term. The inclusion of Telstra in our portfolio is game-changing. To have a corporate tenant the calibre of Telstra and being an ASX 20 listed company. We're very excited for Telstra to join our portfolio. In addition to the Telstra asset, we've also acquired two additional industrial assets located in New South Wales and Victoria, totalling $30 million. In order to fund the acquisition, today we've announced a non-renounceable rights issue for a total of $340.8 million.

Rachael Jones: That's very exciting news. And just to the last question now, what is guidance?

Jesse Curtis: CIP is guiding the funds from operation of 17.4 cents per unit and distributions of 17 cents per unit for FY21.

Rachael Jones: Jesse Curtis, thanks so much for the update, and congratulations on those acquisitions.

Jesse Curtis: Thank you, Rachael.


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