Centuria Industrial REIT’s portfolio valuation increased by $326 million in the 2022 financial year, up 11% year-on-year.
During the 2022 financial year, the REIT recorded rental growth of 11% and leased 185,200 sqm, representing 14% of its portfolio gross lettable area.
Jesse Curtis, CIP Fund Manager and Centuria Head of Industrial, said Australia had reported one of the lowest industrial vacancy rates in the world at 0.8%, driven by occupier demand outstripping supply.
“Subsequently, CIP benefitted from significant market rental growth, achieving releasing spreads of 11% over prior passing rents,” Curtis said.
“Furthermore, with circa 30% of CIP’s leases expiring prior to FY26, the REIT is well placed to take advantage of sustained demand and benefit from continued forecast rental growth.
“In particular, 85% of the portfolio is positioned within supply-constrained urban, infill markets, which are high-demand areas for ecommerce and logistics operators, providing last-mile access to densely populated areas.”
The REIT said there was an average 32-day downtime between tenancies, reflecting sustained high occupier demand and limited supply.
The REIT’s portfolio grew 42% to 88 assets worth $4.1 billion, driven by $765 million worth of acquisitions.
The new acquisitions included 23 assets and three development sites, which were expected to provide $155 million end value and about 60,000 sqm of new A-grade industrial space.
“CIP’s development sites aim to help meet market demand for high-quality industrial space and we are able to leverage Centuria’s inhouse development capabilities to execute on several value-add and development projects,” Curtis said.
“Additionally, CIP continues to build scale through land consolidation strategies within key urban submarkets.”
National industrial property dealmaking declined 63% year-on-year to $4.1 billion in the second quarter of 2022, according to MSCI Real Assets.
For the six months of the year, industrial deal volume fell 31% YOY to $9.9 billion.
According to recent JLL research for Q1 2022, activity in Australia’s industrial and logistics sector remained robust.
However, headwinds such as dwindling leasing options for occupiers and limited assets to market for investors had dampened volumes.
Pricing continued to sharpen in the logistics and industrial sector, which had further compressed average yields, JLL said.