Deleveraging, strong leasing activity delivers value for Centuria Industrial REIT investors
Experience pays off as strong operational results translate into performance for unitholders
Centuria Industrial REIT (CIP) today announced a number of key highlights on results achieved since 31 March 2018, including:
- Reduction in CIP’s gearing to 37.2%1, the result of an accelerated de-leveraging program, driven by:
- A revaluation gain of $27.4 million2 from 10 external valuations, reflecting a 10.8% increase on assets re-valued
- Divestment of 6 Albert Street, Preston, VIC for $30.1 million, a 10.7% premium to prior valuation.
- As a result, CIP’s NTA will increase 12 cents to $2.581 per unit, an overall increase of 23 cents or 9.8% since June 2017.
- Continued leasing success, with 22,041 sqm of leases3 agreed since 31 March 2018, taking year to date leasing to 236,019 sqm. This reflects 32.1% of the portfolio’s lettable area4.
- Provision of FY19 distributable earnings guidance, reflecting impact of de-leveraging strategy.
Commenting on the results, CIP Trust Manager Ross Lees said:
“Today’s positive results demonstrate our ability to create unitholder value and the benefits of our active management and leasing focus across CIP’s portfolio.
“The sale of 6 Albert Street, Preston, VIC, at a significant premium to book value has provided an opportunity to accelerate CIP’s de-leveraging program, whilst adding value for unitholders and further improving the portfolio’s near-term lease expiry profile.
“This de-leveraging program is a key milestone for the REIT and reflects our ongoing commitment to prudent capital management.
“It is particularly pleasing that record leasing activity has driven significant revaluation gains over the past 12 months, whilst we have recycled out of short WALE assets at significant premiums to book value.
“This activity has significantly increased CIP’s NTA whilst transforming the lease expiry profile by eliminating a number of near term expiry risks.”
Full details on the announcement are available in today’s CIP ASX release.
1 On a 31 December 2017 pro forma basis, and excludes capital expenditure incurred since 31 December 2017. Gearing is defined as total borrowings minus cash / total assets minus cash and goodwill.
2 Reflects gross increase, does not take account of capital expenditure incurred since 31 December 2017.
3 Includes leasing deals at Heads of Agreement.
4 Portfolio GLA adjusted to reflect pending asset sales at 6 Albert Street, Preston and 39-45 Wedgewood Drive, Hallam