Active start for Centuria Metro

9 February 2017

Publication: Australian Property Journal
Author: Nelson Yap
Date: 9 February 2017

Active start for Centuria Metro

THE Centuria Metropolitan REIT has had a busy start to the FY17, securing 22 leasing transactions in the six months to December 31.
CMA posted a statutory net profit of $27.1 million up from $19.3 million in the previous corresponding period. Distributable earnings was unchanged from the previous year, of
$10.9 million.
The REIT’s distribution increased to 10.4 cents per security from 10.1 cps.
Trust manager Nicholas Blake said the first half of FY17 was a positive one for CMA with significant leasing success across 22 transactions, or 6.9% of the portfolio, including the elimination of key near term expiries and vacant space.
“We remain focussed on actively managing the portfolio’s lease expiries to mitigate earnings risk over the next 1 to 3 years,” he added.
Since 30 June 2016, CMA has secured 22 leasing transactions across a total 7,750 sqm, comprising 14 new leases over 4,640 sqm and 8 renewals over 3,110 sqm. At 31 December 2016 CMA’s portfolio was 98.9% occupied with a 4.2 year WALE. Of the 7,750 sqm of transactions secured, 2,420 sqm represents new leasing over previously vacant space, 4,198 sqm relates to upcoming FY17 expiries, and 1,132 sqm relates to FY18 and beyond expiries.
At 31 December 2016, CMA’s portfolio was valued at $417.5 million representing an increase of 4.7 per cent since 30 June 2016. As a result, NTA has increased 14 cents (6.4%) to $2.32 per security. The weighted average capitalisation rate of CMA’s portfolio has firmed 34 basis points to 7.52% at 31 December 2016.
“We expect 2017 will continue to be a strong year for valuation growth with capitalisation rates for metropolitan assets continuing to firm relative to prime grade CBD assets and additional upside to be extracted through active management and repositioning strategies. Importantly, most metropolitan markets are experiencing real rental rate growth coupled with contracting incentives and continuing strong tenant demand,” Blake continued.
CMA’s FY17 earnings guidance of 18.7 – 19.0 and distribution guidance of 17.5 cents per security remain unchanged.
Meanwhile CMA is taking steps to simplify its corporate structure. CMA is currently structured as a stapled trust scheme, where securityholders own securities in each of Centuria
Metropolitan REIT #1 and Centuria Metropolitan REIT #2.
Australian Property Journal

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