Centuria Industrial REIT Secures 102,000 sqm Leasing and Advances $60m Developments
Centuria Industrial REIT reports robust Q3 leasing activity with over 102,000 sqm of lease terms agreed year-to-date and advances $60 million in development projects, reaffirming its FY25 earnings and distribution guidance.
- 102,000 sqm of lease terms agreed year-to-date
- 41% increase in positive re-leasing spreads
- $60 million in developments progressing in South Australia and Victoria
- Strategic land acquisition in Canning Vale, WA
- FY25 Funds From Operations guidance reaffirmed at 17.5 cents per unit
Strong Leasing Momentum
Centuria Industrial REIT (ASX: CIP) has delivered a solid update for the third quarter of FY25, highlighting sustained leasing momentum across its portfolio. With approximately 102,000 square metres of lease terms agreed year-to-date, the REIT is capitalising on strong demand for urban infill industrial assets. Notably, positive re-leasing spreads have increased by 41%, underscoring robust rental growth and tenant appetite in key Australian markets.
Key leasing deals during the quarter include new five-year leases in Western Australia’s Kewdale Welshpool precinct and Victoria’s Keysborough area, as well as a significant renewal with Fujitsu in Malaga, WA. These transactions reflect CIP’s focus on high-quality, strategically located industrial properties with strong tenant profiles and long lease terms.
Development and Land Consolidation Progress
Alongside leasing success, CIP is advancing approximately $60 million worth of development projects in Direk, South Australia, and Derrimut, Victoria. The Direk developments are progressing towards practical completion in FY26 Q3, while the Derrimut project is set to commence in Q4 FY25. Management remains optimistic about leasing outcomes for these projects, which are expected to further enhance the portfolio’s income and capital growth potential.
In a strategic move to consolidate its land holdings, CIP acquired a 30% interest in a $38.6 million industrial facility in Canning Vale, WA. This acquisition complements CIP’s existing assets in the area and aligns with its broader strategy to strengthen its position in high-demand urban industrial markets with limited supply.
Reaffirmed Financial Guidance
Reflecting confidence in its operational performance and market fundamentals, CIP has reaffirmed its FY25 Funds From Operations (FFO) guidance at 17.5 cents per unit and distribution guidance at 16.3 cents per unit. The REIT’s portfolio benefits from strong urban infill industrial demand, limited vacancy rates, and favourable supply-demand imbalances, particularly in Sydney and other major metropolitan centres.
Grant Nichols, CIP Fund Manager, emphasised the strength of the portfolio’s metrics and the compelling fundamentals underpinning the industrial sector. He noted that CIP’s focus on urban infill assets positions it well to capitalise on ongoing market tailwinds and deliver sustainable income growth for unitholders.
Looking Ahead
As CIP continues to execute its leasing, development, and acquisition strategies, the REIT appears well-placed to navigate the evolving industrial property landscape. The combination of strong tenant demand, strategic asset management, and disciplined capital deployment should support ongoing portfolio growth and income stability.
Bottom Line?
Centuria Industrial REIT’s Q3 update reinforces its position as a leading urban industrial player, setting the stage for continued growth amid tight market conditions.
Questions in the middle?
- How will leasing negotiations for the remaining development space progress ahead of practical completion?
- What impact will rising construction costs or interest rates have on CIP’s development pipeline?
- Could further land acquisitions accelerate CIP’s consolidation strategy in other key urban industrial markets?
