This article is from the Australian Property Journal archive
CENTURIA’S flagship office trust, Centuria Office REIT (COF), increased its portfolio occupancy in the first half of FY23 and is confident its geographically diversified portfolio will benefit from the demand occurring for both CBD and metropolitan workplaces.
COF swung to an interim loss year-on-year, from a $63.6 million profit last year to a $17.4 million loss as like-for-like portfolio valuations declined by 45%, or 2% of prior portfolio value.
Funds from operations fell from $54.7 million to $48.6 million, and on a per basis unit from 9.8c to 48.6c.
Distributions were down from 8.3c to 7.05c per unit.
Across its $2.3 billion, 23-asset portfolio, COF struck 30,420 sqm of leases in the period, representing 10% of total net lettable area, and boosting occupancy from 94.7% six months ago to 96.4%, while weighted average lease expiry was maintain at 4.2 years.
“Many Australian office markets demonstrated positive tenant demand through HY23, with most demand occurring outside of Australia’s major CBDs, enabling COF’s geographically diversified portfolio to benefit from the positive momentum,” said COF fund manager and Centuria head of office, Grant Nichols.
“COF’s leasing activity substantiates the increasing demand for metropolitan and near-city office markets that lends themselves to affordable office accommodation, an increasing consideration from occupiers in the current economic environment.”
Property Council of Australia data released this week showed demand for CBD offices increased 0.1% and by 0.3% for metropolitan offices in the six months to January
Nichols said the encouraging leasing activity runs contrary to anecdotal speculation concerning the impact flexible work may have on demand for office space.
“With tenants increasingly recognising the benefit offices provide to collaboration and culture, and labour demand remaining strong, we are confident that COF’s quality office portfolio will continue to attract and retain tenants.
“With positive industry data revealing an increasing number of workers returning to the office across all capital cities and tenants generally seeking to accommodate peak office occupancy rather than average occupancy, we are confident tenant demand will continue in the near term.”
