Centuria $4bn empire gears up for growth

2 March 2017

Publication: The Australian
Author: Ben Wilmot
Date: 2 March 2017

Centuria $4bn empire gears up for growth

Specialist investment manager Centuria Capital Group will look to expand its near $4 billion property funds empire as it capitalises on consolidation in the Australian real estate investment trust sector.
The group delivered a healthy $5.7 million first-half profit after acquiring the bulk of 360 Capital Group’s real estate funds management platform, boosting stabilised income.
Centuria also made an unsuccessful tilt for the GPT Metro Office Fund. “Notwithstanding two major corporate actions in the half, the group grew its property funds management business organically,” chief executive John McBain said.
He noted the growing importance of the group’s co-investment stakes in its funds and said it would look to “grow our fund management platforms more aggressively”.
The period was transformational for Centuria and saw a significant diversification of its real estate platform. It now manages three REITs and an unlisted portfolio, lifting market capitalisation to about $261m.
Centuria runs listed metropolitan and urban property funds, which it says are “complementary platforms”, and there is potential to merge these funds to form a $650m dominant metropolitan office REIT.
The group reaffirmed its financial 2017 guidance, with operating net profit expected to be $14.9m.
Operating earnings per security guidance is at 9.9c, with the distribution at 7.5c per security.
The group’s property funds management business bought $324m of assets and won new capital partners including US giant BlackRock and European group SEB Asset Management on larger joint acquisitions.
The group also launched a new open-ended Centuria Diversified Property Fund and is on target to run about $4bn of funds by the end of the financial year.
Centuria said it would “focus on building further funds under management both organically and by acquisition of complementary platforms where they are accretive”.
The group’s unlisted property business will also broaden its already wide distribution network to include private banks and partnerships with global investors for large deals.
More corporate plays may be on the agenda.
Centuria said it anticipated “further consolidation will occur in the REIT space and Centuria will participate in acquisitions where they add value to both the group and downstream investors”.

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