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Grant Nichols_ Banner CIP Fund Manager and Centuria Head of Listed Funds
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Industrial scarcity bolsters CIP’s transactions and leasing in Q3 FY26

  • $188m of divestments achieve average 17% premium to book value1
  • c.14,400sqm of lease terms agreed2 across four transactions
  • FY26 year to date re-leasing spreads 36%3
  • Reaffirmed FY26 FFO4,5 guidance range of 18.2-18.5 cpu, distribution guidance of 16.8cpuv

Since 31 December 2025, Australia’s largest listed pure-play industrial fund, Centuria Industrial REIT (ASX:CIP), has capitalised on limited supply in urban infill markets by securing sales at significant premiums to book value, and achieving robust re-leasing spreads.

During Q3 FY26, CIP divested four assets worth $188 million providing an average premium to book value of 17%. Following settlement, the proceeds from the divestments will reduce the REIT’s gearing by c.3%.

Contracts were exchanged for a c.25,420 sqm cold storage facility at 67-69 Mandoon Road, Girraween NSW for $98 million, providing a 15% premium to its 30 June 2025 book value. The Girraween facility had been earmarked for redevelopment when CIP received an off-market offer, highlighting owner-occupier demand for well-located assets.

CIP also divested 50-64 Mirage Road, Direk SA, a newly completed development with sales contracts exchanging within weeks of the project achieving Practical Completion (PC). The asset will be divested for $50 million, providing a 33% premium to total project costs, delivering a 25% IRR.

Additionally, a long-held 12,825sqm warehouse at 32-54 Kaura Avenue, Edinburgh SA was exchanged for $22.7 million at an eight per cent premium to book value and a 9,371 sqm distribution centre at 40 Scanlon Drive, Epping Vic exchanged for $12.1 million at a four per cent premium to book value.

Grant Nichols, CIP Fund Manager and Centuria Head of Listed Funds, said “The Australian urban infill industrial markets are characterised by land constraints, limited supply and high operator demand. CIP maintains a strong bias towards these markets, with around 85% of its portfolio located in core urban infill markets. During this quarter, we have illustrated the merits of this strategy by securing significant sales premiums and leasing success.”

Across CIP’s portfolio, 14,373 sqm of lease termsii were agreed and year-to-date re-leasing spreads average 36%, reflecting the significant under-renting that exists within CIP’s portfolio and the ongoing comparatively strong market conditions that are prevalent across Australian industrial markets, particularly within infill locations.

Mr Nicols continued, “The strong divestment metrics achieved during the quarter more than reinforce CIP’s net tangible assets, and considering CIP’s current trading price, further highlights the disconnect to direct market pricing.

“Looking ahead, we foresee the domestic infill industrial market’s supply-demand imbalance to persist with limited construction of new warehouses coupled with consistently high occupier demand as tenants look to strengthen their delivery times and reduce transport costs.

“Current macroeconomic uncertainty, resultant of the Middle East conflicts and global oil constraints, is impacting inflation and construction price pressures. These factors are expected to curtail future industrial market supply. The value of high-quality, existing infill industrial assets is expected to increase as the disconnect to replacement cost continues to escalate.”

CIP reaffirms its upgraded FY26 Funds From Operations (FFO) guidance4,5 range of 18.2-18.5 cpu. FFO is reflective of the REIT’s earnings. Distribution guidance5 is also reaffirmed at 16.8 cpu, expected to be paid in quarterly instalments.

  1. Includes assets exchanged, yet to settle
  2. Includes heads of agreement (HOA). Leasing refers to Gross Lettable Area (GLA)
  3. Excludes capped rent reviews on exercise of options, renewal of specialised cold storage renewals and new lease where tenant vacated following unexpected liquidation
  4. Funds From Operations (FFO) is CIP’s underlying and recurring earnings from its operations. This is calculated as the statutory net profit adjusted for certain non-cash and other items
  5. Guidance remains subject to unforeseen circumstances and material changes in operating conditions
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