Leading ASX dividend share Centuria Industrial REIT (ASX: CIP) just reported its FY21 result and expects to pay an even bigger dividend in FY22.
Centuria Industrial REIT is Australia’s largest domestic pure play industrial REIT.
FY21 report
Over the year, the business expanded its portfolio to 62 industrial properties, with the total portfolio value increasing to $2.9 billion. It acquired 18 high-quality industrial assets worth $966 million. Within this, it introduced two new industrial sub-sectors – data centres and cold storage.
Centuria Industrial REIT currently has a weighted average lease expiry (WALE) of 9.6 years. Its average tenant is signed on for around 10 years. The occupancy rate is around 97%.
It also benefited from a $587 million (being 25% in percentage terms) valuation uplift, including $149 million from FY21 acquisitions.
Centuria Industrial REIT generated $611.2 million of statutory net profit, which includes the valuation gains.
In terms of the net rental profit, it generated $91.4 million of funds from operations (FFO). That translates to a 17.6 cents per unit, which was in line with its upgraded guidance for FY21.
The distribution for FY21 was 17 cents per unit, in line with its FY21 guidance.
Balance sheet and valuation
Centuria Industrial REIT’s net tangible assets (NTA – its underlying value) increased by 36% over the year to $3.83 per unit.
The balance sheet’s gearing/debt was 27.8%, which is below the target gearing range.
FY22 outlook
The REIT’s goal is to deliver long-term secure income and capital growth.
It’s expecting FFO per unit of at least 18.1 cents (up 2.8%) whilst the distribution guidance is 17.3 cents per unit (up 1.75%). That translates to a yield of 4.5%.
Centuria Industrial REIT fund manager Jesse Curtis said: “With rising e-commerce, there’s a shift in consumer expectations for rapid delivery times. This creates strong demand from occupiers for assets located in urban infill markets to help manufacture, fulfil or distribute orders quickly, and these markets are a focus for CIP. CIP’s focus centres on building critical mass in key urban infill markets and, through acquisitions, leasing and value-add projects, the REIT aims to deliver long-term sustainable income streams and capital growth to unitholders.”
Centuria Industrial REIT is a quality ASX dividend share to think about, though I’m not sure how much capital growth is left considering interest rates are likely to just rise from here.
