Centuria upgrades FY22 guidance, expects elevated demand for industrial assets

Tue 01 Feb 22, 12:35pm (AEST)
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Key Points

  • Centuria upgraded its earnings per share guidance for FY22
  • The company acquired 21 properties worth $680m in the first half of FY22
  • Demand for industrial space is expected to remain elevated thanks to rise of eCommerce

Centuria Industrial REIT (ASX: CIP) continues to ride the strong demand for quality industrial property, delivering an outsized 46.5% return on equity in the first half of FY22. 

“CIP delivered a strong performance throughout the first half of FY22 with significant leasing activity supported by exceptional, double-digit rental growth and strategic acquisitions,” said Jesse Curtis, CIP Fund Manager and Centuria’s Head of Industrial.

“This success has enabled CIP to upgrade its FY22 Funds From Operations (FFO) guidance of no less than 18.2 cents [per share] and reiterated FY22 distribution guidance of 17.3 cents [per share], reflecting a 4.6% distribution yield.”

The new FFO figure represents a 7.1% increase compared to FY21 figures.

Centuria momentum drivers 

During the first half, Centuria acquired 21 new assets worth $680m focused on sought-after urban infill industrial properties. 

The acquisitions extend the company’s portfolio to 80 assets, up from 62 in FY21. 

Curtis expects industrial rents to continue to rise as "demand for industrial space [is] expected to remain elevated, thanks to customer shifts to eCommerce plus onshoring to maintain supply chain resilience ...".

Looking ahead, Centuria said its well placed to leverage these themes, with $290m in cash available and a flexible debt position. 

What brokers think 

Six major Australian stockbrokers cover Centuria. 

The consensus is a Buy rating with a $4.03 price target (2.5% upside). 

The latest note from Macquarie on 24 January said that the REIT sector could benefit from a flight to defensive assets. 

Macquarie was expecting first half FY22 FFO of $52.9m versus the $53.9m reported.

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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