This article is from the Australian Property Journal archive
A BULLISH Centuria will look to continue to grow its platform and move further into healthcare and agricultural real estate after more than doubling its funds under management through FY21, with the acquisitions of Primewest and New Zealand group Augusta also helping to boost its bottom line.
It issued FY22 operating earnings per security guidance of 13.2 cps and distributions of 11.0 cps, both 10% higher than FY21’s 12.0 cps and 10.0 cps respectively.
The group’s 106% increase across its listed and unlisted real estate divisions over the past year to $16.5 billion was also driven by a record $2.5 billion of acquisitions, and saw its S&P/ASX 200 Index inclusion last month.
Operating profit attributable to property funds under management surged 40% to $45.9 million on the prior corresponding period, and operating recurring revenue increased from 86% to 92% of total revenues.
Operating revenue rose 40% to $212.7 million, and operating profit after tax lifted 32% to $70.2 million.
Centuria’s property platform grew 30% across New Zealand, underpinned by the Augusta buy, and by 125% increase in Australia following its absorption of Primewest.
Its listed platform – which includes Centuria Industrial REIT and Centuria Office REIT – grew 37% to $5.5 billion. The listed Centuria Industrial REIT added circa $1.0 billion of industrial acquisitions and benefited from a $587 million valuation uplift.
Unlisted assets under management increased 175% to $11 billion. Several unlisted funds were launched during the period, headlined by the Centuria Government Income Property Funds for an inner Melbourne office building leased to the Victorian government and bought for $224 million, the Visy Penrose Fund, underpinned by the NZ$178million Visy Glass facility, and the Augusta Industrial Fund (NZ), underpinned by 12 industrial assets worth NZ$547million.
Forays into the healthcare property sector saw the Centuria NZ Property Fund seeded with an NZ$55million medical centre and the Centuria Healthcare Property Fund expanding to nine healthcare properties worth $190 million.
Centuria also acquired a 50% interest in a real estate debt fund specialist, resulting in Centuria Bass Credit. To date, the business has secured a $448 million-dollar loan book and launched a $176 million-dollar open-ended debt fund.
“Decentralised office, industrial and healthcare remain the backbone of our real estate platform, however we have further diversified our asset classes, expanding into three compelling new sectors – agriculture, large format retail and daily needs retail, resulting from our merger with Primewest,” Jason Huljich, Centuria joint CEO, said.
He and joint CEO John McBain said Centuria will “continue to grow its platform throughout FY22 and beyond”.
Centuria’s development division grew to $1.9 billion.
Platform rent collection was 98.8%, and record leasing activity was achieved with 437,000 sqm tallied across 215 individual transactions, equating to 17% of the group’s leasable area.
Centuria grew access to institutional capital and has a total mandate capacity of $2.3 billion, of which over $1 billion has yet to be drawn.
“We believe this aspect of our business will grow quickly, affording access to larger transactions which in combination with Centuria’s suite of listed and unlisted funds will accelerate AUM growth,” the joint CEOs said.
Net asset value increased from $1.52 to $1.92.
Balance sheet flexibility increased from the $198.7 million listed notes issuance.
