This article is from the Australian Property Journal archive
CENTURIA Capital Group’s (ASX: CNI) diversified platform returned strong growth over FY23, driven by alternative assets.
Centuria posted a statutory net profit after tax of $105.9 million for the FY23 period, up from a loss of $37.9 million in FY22. With statutory earnings per security at 13.3 cents up from negative 4.8 cents in FY22.
CNI’s operating profit after tax came in at $115.6 million in FY23, in line with FY22’s $114.5 million, with operating earnings per security at 14.5 cents, stabled from FY22.
With distribution per stapled security at 11.6 cents up from 11.0 cents in FY23.
Total operating revenues were up to $311.7 million, with recurring revenues of 91% generated stabled income, up from 89% in FY22.
While operating EBIT increased 7.5%, offsetting the full impact of rising interest rates.
Centuria’s real estate platform was valued at $20.2 billion, with one-third weighting to listed funds to $6.4 billion and two-thirds unlisted funds, which increased 6% to $13.8 billion.
Over FY23, Centuria made $811 million in real estate acquisitions and $542 in real estate finance, as well as completing $400 million in gross development projects.
Institutional assets under management expanded 11% to $2.1 billion through the establishment of new strategic partnerships.
Over the period, Centuria’s agricultural assets increased 33% to $530 million, with Real Estate Credit increased 59% to $1.27 billion.
“Centuria continued to focus on differentiating its traditional office, industrial and retail platforms, while markedly expanding across the alternatives sectors of real estate finance and agriculture,” said Jason Huljich, joint CEO at Centuria.
“The group’s on-going commitment to hands-on asset management has delivered high occupancy and healthy WALEs.”
Centuria managed around 420 assets and around 2,500 tenant customers, with the real estate platform boasting 97% occupancy, rent collections at 99%, a WALE of 6.1-years and an average cap rate of 5.81%.
“As market conditions across Australia and New Zealand changed throughout FY23, Centuria’s suite of new investment products broadened to match investor risk appetite,” added Huljich.
“Significantly, the unlisted platform benefitted from $0.6 billion of capital inflows across the traditional and alternative sectors. Our New Zealand business launched an equity-only agriculture fund, which was oversubscribed. Additionally, two Australian single-asset neighbourhood shopping centre funds and four single-asset credit funds were fully subscribed.”
Over the period, more than 548,000sqm in leasing terms were agreed to, with 542 in lease transactions in 13% of platform lettable area.
“Delivering growth across our funds management business during FY23 was a function of strong recurring earnings coupled with the execution of our strategy to diversify our real estate platform,” said John McBain, joint CEO at Centuria.
“The Group maintains a healthy balance sheet, which has ample capacity to operate its normal business activities.”
CNI’s balance sheet had flexibility with more than $329 million in cash and undrawn debt available, with operating gearing of 10.6%, down from 17.3% in HY23.
Net asset value increased to $1.77 per security and net operating cash inflows of $83.4 million.
“Market sentiment indicates that at some point during FY24 interest rates should stabilise allowing markets to begin the journey towards normalisation. Accordingly, Centuria will maintain a disciplined approach in navigating what we believe will be a challenging FY24 backdrop. We approach FY24 with a sharp focus on the industrial and alternative sectors as important revenue drivers,” concluded McBain and Huljich.
“We provide guidance at levels that reflect our best estimate of earnings based on current market conditions. This guidance anticipates lower performance fees and development profits, restrained transaction volumes and increased finance costs.”
Centuria provided a FY24 operating EPS guidance between 11.5 and 12.0 cents per security and DPS guidance of 10.0 cents per security.
