Centuria Industrial REIT's profit (ASX:CIP) soars 712% for FY21

Company News

by Melissa Darmawan

Centuria Industrial REIT’s profit (ASX:CIP) catapulted by 712 per cent for the 2021 financial year, thanks to a string of successful acquisitions, a strong valuation uplift and the eCommerce boom from the pandemic.

The property dynamo fired up their acquisition engine, bumping up their portfolio to 62 industrial assets boosting their portfolio value to $3.1 billion, after they inked 18 contracts over this period.

Australia’s largest listed pure-play industrial REIT banked $91.4 million of funds from operations to post $611.2 million statutory net profit, along with a 25 per cent valuation uplift to $587 million with occupancy sitting at 96.9 per cent.

This defensive portfolio includes tenants which have reaped from the boom in online shopping providing warehouse storage linked to the distribution of consumer staples and pharmaceuticals goods, with over 50 per cent of CIPs income coming from their tenant’s client base. Their ever growing acquisitions have contributed to the growth component of the portfolio, as have seen this period.

 “With rising e-commerce, there’s a shift in consumer expectations for rapid delivery times. This creates strong demand from occupiers for assets located in urban infill markets to help manufacture, fulfil or distribute orders quickly, and these markets are a focus for CIP. CIP’s focus centres on building critical mass in key urban infill markets and, through acquisitions, leasing and value-add projects, the REIT aims to deliver long-term sustainable income streams and capital growth to unitholders.”

Their balance sheet remains strong with $274 million of undrawn debt and gearing at 27.8 per cent, operating well within covenants with interest coverage ratio of 6.3 times and loan to value ratio of 31.8 per cent.

CIP's distributions of 17.0 cents per unit was in line with guidance, though lower than last year at 18.68 cents with payment set to be paid on the 10 August.

“FY21 was a successful year for CIP, driven by transformative acquisitions and major portfolio leasing. Strong sector tailwinds supported increased tenant demand and record low national vacancy rates, propelled by the continued rise of e-commerce, positively impacting industrial property markets,” said CIP fund manager, Jesse Curtis.

“CIP continued to execute its strategy with 18 high-quality industrial acquisitions worth $966million. This included $631million worth of assets across two new high conviction industrial sub-sectors, Data Centres and Cold Storage. CIP’s portfolio and tenant customer quality continued to improve with $335 million worth of urban infill logistics acquisitions.”

Shares in Centuria Industrial REIT’s profit (ASX:CIP) are trading 0.8 per cent higher at 3.88.

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.