Welcome to our New Year 2021 Newsletter
In this edition, John provides an update on the Group’s AUM growth and our recent ESG initiatives. Jason highlights recent real estate transactions along with the announcement of our upcoming unlisted fixed-term industrial fund, Centuria Industrial Income Fund No 1 (CIIF1) launch. Andrew reveals Centuria Healthcare Property Fund (CHPF’s) second fundraising closed 2020 on a high, with a significant oversubscription. Finally, Jason is joined by Head of Funds Management, Ross Lees, and Head of Transactions, Andrew Essey, to discuss 2021 market predictions. The latter is a three-part series covering macroeconomic issues, the markets with a focus on REITs, and real estate transaction volumes.
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Centuria Management Team
Read Corporate News Article
Welcome to Centuria’s New Year 2021 Newsletter.
The last calendar year proved to be challenging, but despite the pandemic, bushfires and floods, Centuria emerged in a relatively strong position. We grew total assets under management to over $10 billion and Centuria’s market capitalisation expanded to $1.4 billion. Adding to this is our REITs’ collective market cap of circa $2.6 billion.
Our growth is partially credited to our corporate expansion into New Zealand, the launch of several unlisted funds and Centuria Industrial REIT’s portfolio expansion. Already this year, we’ve hit the ground running and we will share a detailed update during our half-year FY21 results on Wednesday 10 February.
Also, our interim distribution of 4.50 cents per stapled security will be paid on 29 January as we announced last year.
Among our corporate programmes throughout the 2020 calendar year, management particularly focused on ESG initiatives. During the last quarter alone, we implemented several social endeavours.
In recognition of NAIDOC Week, Centuria staff learned more about the history, culture and achievements of Australia’s first people through a presentation by property professional and descendant of the Wiradjuri nation, James Russo. James is passionate about promoting aboriginal businesses and engagement of Indigenous people.
Also in November, Centuria reconfirmed its commitment to St Lucy’s, a school dedicated to educating children with disabilities and Autism. Our annual industry trivia night raised substantial funds and set a new benchmark.
Finally in December, staff and management personally raised $2,000 in two weeks for the Philippines Disaster Relief, which was due to the devastating Category 4 Typhoon Vamco.
Throughout 2021, we will continue to report on our ESG commitments and framework.
We are optimistic about the year ahead and hope you share our enthusiasm for a bright year.
Personally, I would like to thank our investors for your unwavering support.
Here’s to a great 2021!
Centuria Capital Group
Read Funds Update Article
Centuria delivered a strong performance throughout the final quarter of the 2020 calendar year, across both our unlisted and listed funds.
The unlisted, open-ended Centuria Healthcare Property Fund settled more than $115 million worth of healthcare assets. It also completed a successful, oversubscribed second fundraising round in the final weeks of the year, which my colleague Andrew Hemming will explain further in an article below. In total, Centuria Healthcare assets across all funds and projects are now worth a collective $895 million.
We also announced the imminent launch of the new, unlisted fixed-term Centuria Industrial Income Fund No. 1, which is set to open for applications in early February 2021. This fund will offer a 6.00% forecast distribution yield in FY21i,ii, growing to 6.25% in FY22ii. The Fund comprises three assets worth $62.5 million, within core markets across Brisbane and Adelaide. The trio of properties are 100% occupied and have a portfolio weighted average lease expiry of 9.1 yearsiii.
For our listed funds, Centuria Industrial REIT (CIP) and Centuria Office REIT (COF), both declared quarterly distributions in line with guidance, which will be paid in January 2021iv.
CIP continued to expand its portfolio throughout the quarter, securing a three-asset, $171 million cold storage portfolio and another $43 million cold storage facility in Ormeau, Queensland. CIP also successfully completed a $125 million fully underwritten institutional placement.
COF continued to deliver a resilient performance throughout the quarter. It also divested a 25% interest in 465 Victoria Avenue, Chatswood, at a premium to book value. This was the only minority interest in its portfolio and the sale will generate increased liquidity and improve the Trust’s robust balance sheet.
Our half year FY21 results for both A-REITs will be reported during the first week of Februaryv.
Centuria remains optimistic about the year ahead and we look forward to sharing news of our successes throughout 2021.
Centuria Capital Group
i. Annualised distribution yield for the period 1 March 2021 to 30 June 2021.
ii. Forecast returns are predictive in nature and are calculated in accordance with a number of underlying assumptions to be set out in the Product Disclosure Statement (PDS). As such, returns may be affected by incorrect assumptions or by known or unknown risks and uncertainties and may differ materially from results ultimately achieved. Returns are not guaranteed.
iii. Weighted average lease expiry by income as at 1 March 2021
iv. For the quarter ending 31 December 2020, CIP will pay 4.25 cents per unit and COF will pay 4.125 cents per unit
v. 1H FY21 Results for CIP will be reported on Tuesday 2 February 2021 and COF will report on Thursday 4 February 2021.
Centuria Healthcare Property Fund Oversubscribed
Read Centuria Healthcare Property Fund Oversubscribed Article
I am very proud to report the latest fundraising round for our open-ended Centuria Healthcare Property Fund was oversubscribed.
Our pure-play unlisted healthcare real estate fund raised approximately $28 million within the final weeks of the 2020 calendar year – which is around $3 million above our target.
The oversubscription is testament to the strength of investors’ appetite for quality assets in resilient sectors, such as healthcare.
The Fund’s portfolio has further expanded with the settlement of a day surgery at Joondalup, WA. We are also contracted to secure another day surgery in Cairns, Queensland. Finally, we are completing due diligence on a further two medical centres: one in Coffs Harbour, New South Wales, and another in Carina Heights, Queensland.
The size of the fund is growing at a steady pace since launching in late August 2020. Its current portfolio is geographically diversified with a healthy weighted average lease expiry of 5.9 years and 100% occupancyi.
Though CHPF is temporarily closed to investment at present, we expect it to open again within the first quarter of the 2021 calendar.
Further information about the fund can be found on our website or by calling 1300 22 44 24.
i. Based on the portfolio as at 31 December 2020 and excludes properties currently contracted or in due diligence.