This article is from the Australian Property Journal archive
THREE major acquisitions totalling $636 million took Centuria Metropolitan REIT’s portfolio value beyond $2.1 billion over the first half, and the trust posted recorded strong growth to its interim profit and funds from operations.
FFO jumped by $12.5 million to $39.0 million compared to the prior corresponding period, while statutory profit increase to $24.7 million from $14.7 million.
CMA’s three purchases were 100% occupied and offered a weighted average lease expiry of 8.0 years. They included a half share in the Central Avenue building at South Eveleigh for $191 million and the entirety of William Square in Perth’s Northbridge for $189.5 million, as well as the landmark Nishi building in Canberra for $256 million.
The trust announced a $185 million capital raising at $3 per unit, and a further $10 million through a unit purchase plan, to partially fund the Nishi acquisition. Family-owned and operated developer Molonglo built the 27,411 sqm complex in NewActon in 2013 as part of the mixed use community between Canberra’s CBD and Lake Burley Griffin.
CMA has increased its portfolio to 23 assets with an average building age of around 15 years, while the WALE has increased to 5.1 years.
Federal government departments now represent the office trust’s largest tenant at 13.3%, and combined with state government departments, the portfolio’s total government exposure increases to over 24.5% of portfolio income. Deals included a 10-year lease at 144 Stirling St in Perth to the Western Australia Police across 10,875 sqm.
CMA completed 24 lease transactions across a total of 28,721 sqm, representing 9.5% of portfolio net lettable area. Occupancy of 99.2% was maintained and portfolio WALE extended from 3.9 to 5.1 years.
Major leases were also secured to Verizon at 203 Pacific Hwy in St Leonards and Data $3 at 555 Coronation Dr in Toowong.
Net tangible assets increased by 8 cents per unit, while gearing is at 33.2%.
Grant Nichols, CMA fund manager, said the outlook for Australian office markets remain solid, with ongoing investment demand supported by the low or falling vacancy rates evident in most major office markets, coupled with a shift to lower interest rates throughout 2019 increasing the relative attractiveness of commercial office property.
“Across the CMA portfolio we continue to generate reasonable levels of tenant demand, as tenants continue to seek opportunities to be located in quality, affordable office buildings that are generally located within close proximity to retail amenity and transport infrastructure.”
CMA reaffirmed its full year FFO guidance of 19.0 cpu, with distribution guidance of 17.8 cpu.
