Key Highlights

  • FY27 guidance is FFO of 18.8 to 19.2 cents per unit and distributions of 17.3 cents per unit.
  • FY26 FFO was $114.1 million, or 18.2 cents per unit, against 17.5 cents.
  • The like-for-like valuation gain was $116 million, or 3.2%, and the portfolio comprised 83 assets valued at $3,934 million.
  • Gearing is 34.9% and interest cover is 2.4 times.

What does Centuria Industrial REIT (ASX:CIP) expect for FY27 after reporting a fifth consecutive period of like-for-like valuation gains? In its FY26 results of 11 August 2026, the REIT guided to FY27 funds from operations (FFO) of 18.8 to 19.2 cents per unit and distributions of 17.3 cents per unit, compared with FY26 FFO of 18.2 cents and distributions of 16.8 cents. The guidance is subject to unforeseen circumstances and material changes in operating conditions.

What CIP owns

Centuria Industrial REIT owns industrial property across Australia. At 30 June 2026 it held 83 assets with a total portfolio value of $3,934 million, covering about 1.23 million square metres of gross lettable area. About 86% of the portfolio is in urban infill markets, a figure we have not verified against the primary release.

Its revenue is rent. Earnings depend on occupancy, the rent achieved when leases are renewed, annual rent reviews and the cost of debt. Development and divestments also affect results.

FY26 results (year to 30 June 2026)

All figures are in Australian dollars and for the year ended 30 June 2026, from the REIT's results announcement of 11 August 2026.

FFO was $114.1 million, up from $110.9 million, or 18.2 cents per unit against 17.5 cents. Distributions, paid quarterly, were 16.8 cents per unit (FY25: 16.3 cents) and totalled $105.2 million, a payout ratio of 92%. Statutory net profit attributable to CIP was $160.4 million, up from $133.1 million, helped by a $72.2 million net gain on the fair value of investment properties.

Weighted average units were 627.5 million against 634.9 million, so per-unit growth was slightly higher than growth in total FFO (our arithmetic). Net tangible assets (NTA) per unit were $4.01, compared with $3.92, with net assets of $2,506.0 million and 624.4 million units on issue. Gearing rose to 34.9% from 33.2%, and interest cover fell to 2.4 times from 2.6 times.

Property values, leasing and rents

The like-for-like valuation gain was $116 million, or 3.2%. The total portfolio valuation movement was $44 million, or 1.1%. Half of the portfolio by value was externally revalued in June 2026. The weighted average capitalisation rate was 5.80%, from 5.86% a year earlier.

Occupancy by income was 95.2% and the weighted average lease expiry was 7.0 years by income. The REIT agreed lease terms over 226,200 square metres, including heads of agreement. The re-leasing spread was 30%, with exclusions the company lists. Like-for-like net operating income grew 5.2%.

Management estimates leases are on average about 17% under-rented and that roughly 55% of leases expiring in the next three years are under-rented. It also cites a market forecast of around 4% annual national face rental growth from 2026 to 2030. These are management estimates, not reported results.

Debt, hedging and the guidance

This is the part of the result that deserves attention. Gearing is 34.9%, drawn debt was $1,386 million against a $1,830 million facility limit, and headroom was $444 million. The all-in cost of debt rose to 4.7% from 4.5%.

Hedging fell to 54% of debt from 86%, with a weighted average hedge maturity of 2.5 years. A $50 million interest rate swap was entered into in July 2026. The REIT also has a $325 million exchangeable note carrying a 3.5% coupon and a $4.00 initial conversion price, with a put option in September 2028.

Weighted average debt expiry lengthened to 3.6 years from 2.9 years. Our own arithmetic: the FY27 FFO range implies growth of about 3% to 5.5% on 18.2 cents, and 17.3 cents of distributions against the 19.0 cent midpoint would be a payout of roughly 91%. These are illustrations of guidance, not predictions.

Transactions and development

In FY26 the REIT acquired $61 million of property at a 5.51% capitalisation rate and divested about $200 million at a 17% premium to book value and a 4.9% passing yield. It says about $460 million has been sold since FY23, all at or above book value.

Current development projects comprise about 37,000 square metres, with about $95 million of expenditure and an estimated end value of about $175 million. They include 51 Musgrave Road, expected mid-2027, and 74 to 94 Newton Road, targeted for late 2027. Completed projects in FY26 included 50 to 64 Mirage Road, sold at a 33% premium to cost.

Management also highlights data centre potential on its sites of more than 250 megawatts. A trade report says development approval for a roughly 40 megawatt facility in Clayton, Victoria, is expected in the first half of FY27. This is potential, not committed income, and we cannot verify the timing.

Risks and what to monitor

Lower hedging means more of the debt book is exposed to interest rate changes. Interest cover of 2.4 times is a metric lenders watch, and gearing above 34% leaves less room if valuations soften. The valuation gains are non-cash, and the capitalisation rate could move.

Leasing is another variable. Occupancy of 95.2% leaves some space to fill, and 30 Fulton Drive in Derrimut was excluded from that figure while it is repositioned. Re-leasing spreads depend on market rents holding up.

Investors may wish to follow quarterly distribution announcements, hedging changes, progress on development leasing and any further divestments. We have not provided a price-to-NTA comparison because we lacked a reliable, dated price source.