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Centuria Office REIT HY26 results indicate metro offices passed cyclical trough

Valuation gains & rental growth for second consecutive period

      • $43m1 office portfolio valuation increase and 4% market rental growth
      • Highest leasing activity in four years totalling 29,354 sqm2; 71% of FY26 lease expiries renewed during HY26
      • 9 Help Street, Chatswood divestment achieves 12.5% premium to book value, improves portfolio and strengthens balance sheet
      • Statutory profit totalling $61.5m
      • Reaffirmed FY26 FFO3 guidance of 11.1-11.5 cpu4 and FY26 distribution guidance of 10.1 cpu4 (9.5% yield5)

Centuria Office REIT (ASX: COF), Australia’s largest listed pure-play office fund, has delivered its interim 2026 Financial Year results, indicating that domestic metropolitan office markets have passed their cyclical trough and entered a new phase of growth.

The office REIT reported a second consecutive period of growth, delivering a $43 million like-for-like portfolio valuation gain and 4% rental growth during the first half of the 2026 Financial Year.

During the period, the REIT executed 29,354 sqm of leasing activity, which was the highest volume since FY22. The REIT leased more space during this half-year period than it had throughout the FY25 Financial Year6 and achieved 100% office occupancy across 10 of its 19 assets. Significantly, 71% of leases that were due to expire during FY26 have already been renewed during the first half of the year.

The REIT also exchanged contracts to divest a B-grade office asset at 9 Help Street, Chatswood NSW for $90 million, representing a 12.5% premium to book value. The asset had been held since COF’s IPO in 2014 and the astute timing of the divestment reflects a c.12% IRR and a 109% capital uplift.

Belinda Cheung, COF Fund Manager said, “During the period, COF delivered record leasing volumes since FY22 and solid rent growth, which have been the key drivers of a second consecutive period of valuation uplift across the REIT’s portfolio. These three strong indicators reinforce improved conditions of domestic metropolitan office markets as it moves past the cyclical trough and enters a new cycle of recovery.

“During HY26, COF exchanged contracts to divest its Chatswood office at a 12.5% premium to book value. This divestment aligns with COF’s strategy to capture optimal value in underlying assets for unitholders, improving portfolio construction and strengthens balance sheet.”

The REIT also cited prevailing sector tailwinds due to diminishing supply with a rise of tertiary office assets converting to alternative use coupled with limited future supply.

Jesse Curtis, Centuria Head of Funds Management, added, “Future office supply remains constrained especially within metropolitan markets where projected office development completions are considerably lower than five years ago. We are also observing office space being withdrawn and repurposed for alternative use such as residential, mixed-use, life science and data centre uses.

“These constraints are anticipated to significantly contribute to a recovery in occupancy rates and rental growth which bodes well for existing A-Grade office landlords, such as COF. These tailwinds reaffirm our optimism for the future of the domestic metropolitan office sector.”

During HY26, COF’s portfolio occupancy was 91%2,7, complemented by a 4.1-year WALE8. The REIT’s modern office portfolio includes 19 high-quality assets worth $1.9billion, with an average building age of 19 years and 93% of the portfolio comprises A-Grade assets. Additionally, 75% of portfolio rental income is underpinned by strong tenant covenants derived from government, multinational corporations and listed entities.

COF delivered $33.4 million in Funds From Operations (FFO)3 – also referred to as earnings – or 5.6 cents per unit (cpu) during the period. Distributions of 5.05 cpu were paid to unitholders in line with FY26 guidance4. COF delivered a statutory profit of $61.5 million.

Ms Cheung concluded, “Looking ahead across the market, high replacement costs are expected to constrain future metropolitan office supply. Rental disparity is more evident in fringe and metropolitan markets where economic rents exceed market rents by up to 64%, highlighting potential opportunities for rental growth and higher occupancy for well located, quality assets such as those in COF’s portfolio.”

COF reaffirmed its FY26 FFO3 guidance range of 11.1 – 11.5 cpu4 and distribution guidance of 10.1 cpu4 (distribution yield of 9.5%5).

COF HY26 results highlights

Belinda Cheung, Centuria Office REIT Fund Manager, discusses the Fund’s HY26 highlights.

1. Reflects gross increase. Excludes capital expenditure incurred.
2. Includes Heads of Agreement and executed leases.
3. FFO is the Trust’s underlying and recurring earnings from its operations. This is calculated as the statutory net profit adjusted for certain non-cash and other items.
4. Guidance remains subject to unforeseen circumstances and material changes in operating conditions.
5. Based on COF closing unit price of $1.07 on 30 January 2026.
6. Leasing activity during FY25 totalled +24,400sqm.
7. By gross income.
8. Weighted average lease expiry (WALE) by gross income.

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