Centuria Industrial REIT

For FY '26, net property income increased to $204 million, up $11.7 million year on year. FFO was $114.1 million, or $0.182 per unit, representing 4% earnings growth versus FY '25, and distributions were $0.168 per unit. Like-for-like net operating income grew 5.2%, the portfolio finished at 95.2% occupancy, and valuations delivered a $116 million uplift with a broadly stable 5.8% weighted average capitalization rate. On capital management, about $450 million of debt was refinanced with margins 10 to 20 bps lower and maturity extended to 4 years, and a $325 million exchangeable note was issued at a 3.5% coupon. FY '27 guidance is for FFO of $0.188 to $0.192 per unit and distributions of $0.173 per unit, with management saying growth should come mainly from embedded rent reversion, leasing, and operating initiatives.

Grant Nichols framed FY '26 as a strong year of execution, emphasizing near-record leasing, solid re-leasing spreads, value-accretive divestments, and progress on the data center strategy. He repeatedly highlighted the gap between direct market evidence and the REIT’s share price, saying the portfolio continues to trade at a material discount to NTA despite leasing, valuations, and sales confirming asset values. His tone was constructive and confident, especially on internal growth drivers such as under-rented leases, infill market scarcity, and the optionality in data centers.

Michael Ching detailed the financial outcomes: NPI of $204 million, up $11.7 million, finance costs of $65.9 million, up $6.9 million, and FFO of $114.1 million or $0.182 per unit. He pointed to strong refinancing execution, including approximately $450 million of debt refinanced on improved terms, a 3.5% coupon on the new exchangeable note, and liquidity of over $450 million, which he said covers the pending FY '27 debt maturity. He also noted around 54% of debt is hedged and that the portfolio’s valuation uplift, 5.8% cap rate, and sales at 4.9% passing yield supported the view that book values remain well under market evidence.

Analysts focused on vacancy at Fairfield East and Bundamba, with management saying geopolitical and diesel-cost pressure hurt tenant demand in FY '26 but that conditions have improved, and they still expect both sites to be leased in FY '27. Questions also pushed on the buyback, with management saying only $36 million of the announced $60 million buyback had been completed and that higher debt costs make buybacks less earnings-accretive than before, though it remains an option. Other notable Q&A topics included Wetherill Park leasing interest, Clayton and Thomastown timing and customer-led data center development, hedge cover changes, and whether the payout ratio should be lowered; management said FY '27 payout ratio will move closer to 90% and that about $12 million will be held back for CapEx and leasing costs.