Centuria Capital Market Update
- $416.7 million acquisition of Telstra Data Centre in Clayton, Victoria, by Centuria Industrial REIT (ASX: CIP)
- Progress re takeover of New Zealand’s Augusta Capital Limited with 85.04% acceptances
- Centuria platform AUM growth to $9.4 billion – 50% increase from commencement of FY20
CIP Acquisitions / REIT Guidance
CIP, Australia’s largest domestic pure play industrial REIT, has released its FY20 financial results announcing FY21 FFO guidance of 17.4 cents per unit.
CIP commences FY21 in a strong position with $447 million in unconditional acquisitions announced today. Included in these acquisitions is the sale and leaseback of the Telstra Data Centre in Clayton, Victoria. The ASX 20 listed telecommunications company has committed to a 30-year lease. Post-acquisition, CIP’s Weighted Average Lease Expiry (WALE) will rise to 10.2 years.
Additionally, Centuria Office REIT (ASX: COF) released its FY20 results), which included FY21 DPU guidance of 16.5 cents per unit. COF is Australia’s largest pure-play ASX listed office REIT with 23 quality assets under management, across major domestic office markets. During FY20, $636.5 million of transactions were executed, with a WALE of 8.0 years.
Augusta Capital Takeover
As at 4 August 2020, Centuria had received acceptances for 85.04% of the total ordinary shares in Augusta and accordingly controls Augusta. The offer is scheduled to close (unless extended) on 10 August 2020. Augusta manages AUD$1.7 billion in AUM.
Once acceptances exceed 90%, Centuria has indicated that it intends to compulsorily acquire all the outstanding Augusta shares on issue, delist the company from the New Zealand stock exchange, and operate the business as a 100% subsidiary. Properly capitalised, Centuria believes Augusta’s core businesses will generate meaningful group revenues and retain a leading position in the New Zealand marketplace.
Centuria’s platform has experienced rapid growth in AUM. Since 2017, CAGR growth has exceeded 34% per annum with over 50% AUM growth since the commencement of FY20.
Centuria Joint CEOs, John McBain and Jason Huljich, said, “Recent major sale and leaseback transactions with Arnott’s, and now Telstra, are excellent examples of our ability to partner with these major, iconic Australian businesses and Centuria believes the data centre acquisition represents a significant investment in telecommunications infrastructure timed to coincide with a major upswing in demand for data storage.”
“Centuria has a dual strategy of executing corporate as well as direct real estate transactions. This business model has significantly enhanced the scope of Centuria’s platform, attracting a broader range of investors and generating more diverse revenue streams for the group. The Telstra data centre acquisition, our simultaneous expansion into New Zealand and the formation of Centuria Healthcare are good examples of this diversity.”
“Our business model remains extremely robust despite current conditions. Given our unlisted distribution network has been starved of quality property funds, initial soundings indicate that the $130 million Centuria Healthcare Property Fund, to be launched imminently, will be well subscribed. With deposit rates expected to remain low for the near term, we are confident this support will endure as further unlisted funds are launched.”
Centuria Capital Limited releases its FY20 Financial Results on 12 August 2020.