Centuria enjoys strong growth in CBD and suburban markets

Centuria enjoys strong growth in CBD and suburban markets

16 February 2018

Centuria Metropolitan REIT is enjoying strong portfolio growth and surging profits as commercial property values peak in CBD markets and make their way into suburban office markets, reports the AFR.

As Australia’s largest ASX-listed metropolitan office REIT, the property trust has booked a $39.2 interim 2018 profit, well ahead of the $27.1 million it posted in last year’s first half.

A buying spree this year lifted the Metro Fund’s portfolio from $560 million to just under $900 million.

The fund, which is geared at just 29.6 per cent, purchased four high-quality, fully occupied assets for a total of $210.9 million and sees the opportunity to expand.

Revaluations and tightening cap rates have also lifted the portfolio’s value $41.6 million or 7 per cent since the first half in 2017.

The Metro Fund currently owns 19 high quality properties in Sydney, Melbourne, Canberra, Perth, and Adelaide.

Suburban commercial property markets are also buoyant, said fund manager Nicholas Blake, with occupancy rates better than those found in the CBD markets.

Centuria’s funds are performing well despite the company being also focused on a complex takeover play for the listed Propertylink Group, which has also drawn interest from Asian logistics property group ESR, says The Australian.

In the first half CIP acquired a 7.7 per cent interest in Propertylink Group for $44.2 million.

The listed office fund turned in a first-half profit of $39.2 million with distributable earnings at $19.9m, representing 9.4c per security.

The $615 million Centuria Industrial REIT reported its 2018 interim result, booking a $49.6 million profit, up from $31.4 million in the 2017 first half.

Other Australian property heavyweights are also enjoying strong profits in the buoyant office market.

Propertylink Group has delivered a $83 million profit, up from $38 million largely because of the huge upward revaluation of its portfolio, notes the AFR.

Diversified property group GPT recorded a $717.7 million lift in values across its diverse portfolio of industrial estates, retail centres and office towers, says The Sydney Morning Herald.

Rising values in Australia’s office sector and shopping malls helped the company deliver a 10.1 per cent increase in after-tax profit of $1.27 billion.

Dexus Property Group unveiled a net profit up 39.3 per cent to $997.1 million for the six months to December 31, 2017. Total assets grew 15.9 per cent to $13.8bn compared to the same half last year, reports The Australian.

As a result of improved performance, Dexus has upgraded its full-year market guidance, now predicting distribution per security growth to 4.5-5.0 per cent, up from 4.0-4.5 per cent previously forecast.

Industrial property giant Goodman Group upgraded its full-year earnings forecast after reporting an interim operating profit of $421.3 million, notes The Urban Developer.

Goodman enjoyed an 8.5 per cent increase on the group’s 2017 result, prompting an upgraded EPS forecast of 46.5 cents, with an upgraded full-year distribution of 28 cents per security.

Listed real estate agency CBRE recorded an all-time high for both revenue and earnings in 2017, driven by occupier outsourcing and leasing fee revenue, says the AFR.

Global revenue hit $US14.2 billion ($18 billion), an increase of 9 per cent, with CBRE’s Pacific business reporting a record revenue result in the fourth quarter after a 9 per cent increase in revenue compared with the previous corresponding quarter.