Centuria Industrial REIT (ASX: $CIP) FY24 Financial Results Overview

Centuria Industrial REIT (ASX: $CIP) has released its Full Year financial results for the period ended 30 June 2024. The company reported $109.3 million in Funds From Operations (FFO), marking a 1% increase compared to the previous corresponding period. The FFO of 17.2 cents per unit (cpu) was consistent with the upgraded FY24 guidance, while the distribution unit (dpu) of 16.0 cents remained in line with the FY24 guidance. The company's Net Tangible Assets (NTA) stood at $3.87 per unit, and it achieved a 6.5% like-for-like Net Operating Income (NOI) growth. Centuria Industrial REIT also provided a strong balance sheet with 34.0% pro forma gearing, 93% debt hedged, and $100m refinanced, with no debt expiry until FY26. The company maintained strong liquidity with $174m cash and undrawn debt, and provided FY25 FFO guidance of 17.5 cpu and distribution guidance of 16.3cpu.

Executive Commentary on FY24 Financial Results

During FY24, strong leasing activity has enabled CIP to grow its forecast FY25 earnings for the third consecutive year with rental growth continuing to more than offset the higher interest rate environment. Solid investment demand for urban infill industrial property has also seen stabilising portfolio valuations at 30 June 2024, evidenced by the strong sales CIP completed through FY24 resulting in $120 million of non-core divestments at an average 4% premium to book value. With a portfolio focused on urban infill industrial markets, CIP continued to capitalise on strong market tailwinds to deliver exceptional re-leasing spreads that averaged 43% across 300,000sqm of leasing. With around 39% of portfolio leases expiring by FY28, CIP is well placed to continue benefiting from the rental growth that has occurred across Australia's urban infill industrial markets and the unrealised reversion imbedded in the CIP portfolio.

Summary of FY24 Financial Results and Outlook

Centuria Industrial REIT (ASX: $CIP) reported a solid performance in its FY24 financial results, with positive growth in Funds From Operations and strong leasing activity. The company's strategic divestments and acquisitions have contributed to maintaining a healthy balance sheet and a strong portfolio. Looking ahead, CIP aims to benefit from the strong sector tailwinds such as ecommerce adoption, onshoring of production and assembly, data centre growth, and increased demand for cold storage, particularly in infill industrial markets. The company has provided FY25 FFO guidance of 17.5 cpu and distribution guidance of 16.3cpu, indicating a positive outlook for the upcoming year.