Highlights

  • FY26 funds from operations were $114.1 million, equal to 18.2 cents per unit.
  • Portfolio occupancy was 95.2% with a 7.0-year weighted average Lease expiry at 30 June 2026.
  • The REIT completed substantial leasing activity with positive re-leasing spreads during FY26.
  • Management is assessing data centre opportunities across selected industrial properties.
  • FY27 guidance points to higher FFO per unit while borrowing costs remain a key offset.

Centuria Industrial REIT (ASX:CIP) is Australia’s largest domestic pure-play industrial REIT, with exposure to logistics, distribution, manufacturing, transport, cold storage and data centre properties. At 30 June 2026, its portfolio was valued at about $3.9 billion, with 95.2% occupancy and a 7.0-year weighted average lease expiry. FY27 will test whether leasing momentum can offset higher Debt costs and selected vacancies.

FY26 Earnings and Portfolio Position

For FY26, CIP reported funds from operations of $114.1 million, or 18.2 cents per unit, and distributions of 16.8 cents per unit. Net property income was $204.0 million, with like-for-like income growth of 5.2%. Net tangible Assets were $4.01 per unit and the portfolio recorded a $116 million valuation uplift. The weighted average Capitalisation rate was 5.80%.

Leasing Activity and Vacancy Risk

Leasing was a key operating driver. CIP completed more than 226,000 square metres of leasing activity during FY26, with positive re-leasing spreads of about 30% on a net rent basis. Management also estimates that parts of the portfolio remain under-rented. The main offset is vacancy risk at Fairfield East in Sydney and Bundamba in Queensland. Securing tenants for these assets is an important FY27 task.

Data Centre Plans Add a New Growth Avenue

CIP is evaluating data centre opportunities across selected industrial properties, with more than 250 megawatts of potential capacity identified across six sites. Clayton in Melbourne is the most advanced, with a 40 megawatt application progressing during 2026. CIP plans to own and lease the real estate rather than operate data centres, so value creation depends on approvals, power access and tenant commitments.

Debt Costs and FY27 Guidance

Gearing was 34.9% at 30 June 2026, near the upper end of the 30% to 35% target range, while Interest Cover was 2.4 times. CIP refinanced $775 million of debt and reported a 3.6-year weighted average debt expiry. The all-in cost of debt was 4.7% in FY26 and is expected to rise to about 5.2% to 5.3% in FY27. FY27 guidance is 18.8 to 19.2 cents of FFO per unit and a 17.3 cent distribution.

Key Risks and What to Watch

The main risks are vacancy duration, higher borrowing costs, development execution and the timing of data centre approvals. Property values may also move with interest rates. For FY27, key indicators include leasing at Fairfield East and Bundamba, occupancy, progress at Clayton and any further change in debt costs.

Key Insights

CIP enters FY27 with positive leasing spreads and potential data centre opportunities, but higher finance costs and selected vacancies remain important constraints. Execution on leasing, Leverage and site approvals will determine whether FY26 momentum translates into higher per-unit earnings.