Highlights

• FFO of $114.1 million (18.2 cpu) for FY26, up 4% on a cents per unit basis on the prior corresponding period.

• Like-for-like NOI growth of 5.2% and re-leasing spreads of 30%, with near-record leasing Volume of 226,200 sqm (18% of portfolio GLA).

• $200 million of divestments at 17% average premium to book value, with NTA of $4.01 per unit.

• FY27 FFO guidance of 18.8-19.2 cpu (up to 5.5% above FY26) and distribution guidance of 17.3 cpu.

Centuria Industrial REIT (ASX:CIP) is Australia's largest domestic pure-play industrial REIT, with a portfolio of 83 Assets worth approximately $3.9 billion, a WALE of 7.0 years, and portfolio occupancy of 95.2%. Managed by Centuria, CIP focuses exclusively on Australian industrial and logistics properties, with assets concentrated in urban infill locations across Sydney, Melbourne, Brisbane, Perth, and Adelaide. The REIT's scale, quality, and concentration in well-located urban infill assets position it as a preferred vehicle for institutional and retail investors seeking pure-play industrial property exposure.

Recent Development

Released on 11 August 2026, Centuria Industrial REIT reported FY26 FFO of $114.1 million (18.2 cpu) — up 4% on a per-unit basis. Statutory profit was $160.4 million. Like-for-like NOI growth of 5.2% was achieved, supported by near-record leasing volume of 226,200 sqm (18% of portfolio GLA) and 30% positive re-leasing spreads. NTA per unit was $4.01 (up from $3.92 in FY25), with the current trading price at approximately 25% discount to NTA.

Capital management was disciplined — $200 million of divestments at 17% average premium to book value, $775 million of Debt refinancing with 10-20bps Margin reductions, and A$325 million of Exchangeable Notes at 3.50% fixed coupon. Gearing was 34.9% with $457 million of Liquidity maintained. A key strategic development was the identification of several CIP assets with characteristics suitable for large-scale data centre conversion, representing a potentially significant near-term opportunity given AI-driven Demand surges. FY27 FFO guidance of 18.8-19.2 cpu and distribution guidance of 17.3 cpu were issued.

Sector Context

The Australian urban infill industrial sector continues to demonstrate structural undersupply relative to demand, driven by e-commerce, onshoring, and data centre requirements. CIP's 30% re-leasing spreads and 5.2% like-for-like NOI growth reflect the broad under-renting across the portfolio (approximately 17% under market). The data centre conversion opportunity is a potentially transformative strategic angle — Fund Manager Grant Nichols noted several CIP assets capable of being ready for service in the relatively near future, potentially aligning when data centre Supply shortages are most critical. The 17% average premium to book on divestments further highlights the gap between Market Price and underlying asset values.

Risks and Uncertainties

Portfolio occupancy at 95.2% — while healthy — is below the 98%+ levels of some peers like DXI, reflecting some vacancy across the 83-asset portfolio. The approximately 25% trading discount to NTA remains a structural challenge, though consistent divestment premiums and strong FFO growth are slowly narrowing the fundamental gap. Data centre conversion opportunities are exciting but capital-intensive, complex in execution, and subject to power availability — which is the primary constraint on Australian data centre development. Higher financing costs remain a headwind for FFO growth relative to NOI growth.

Catalysts to Watch

Progress on data centre conversion opportunities within the CIP portfolio is potentially the highest-impact catalyst — any announcement of a development agreement or conversion commitment for suitable assets would materially re-rate the portfolio's perceived value. Continued strong re-leasing spreads above 25-30% in FY27, as more leases expire at below-market rents, will be the primary operational KPI. Further divestments at premiums to book would continue to validate the underlying asset quality relative to the trading price. Any update on the 250+MW power capacity pathway across the existing portfolio would signal CIP's data centre conversion ambitions.

Final Thoughts

Centuria Industrial REIT (ASX:CIP) delivered another strong operational year, with near-record leasing activity, 30% re-leasing spreads, and disciplined Capital management all contributing to 4% FFO per unit growth. The data centre conversion opportunity adds a genuinely exciting strategic dimension that could materially differentiate CIP's portfolio going forward, while the consistent trading discount to NTA continues to create a compelling valuation case.