Centuria Industrial REIT Closes $188M in Industrial Asset Sales at 17% Average Premium in Urban Infill Markets
Centuria (ASX: CIP), Australia's largest listed pure-play industrial fund, has divested four industrial assets for a combined $188 million since Dec. 31, 2025, achieving an average premium of 17% to book value, the firm announced May 12.
The transactions span urban infill markets in New South Wales, South Australia, and Victoria, and the proceeds are expected to reduce the REIT's gearing by approximately 3% following settlement. Centuria reaffirmed its fiscal year 2026 funds from operations guidance range of 18.2 to 18.5 cents per unit and distribution guidance of 16.8 cents per unit, expected to be paid in quarterly instalments.
Divestment Details
The largest transaction involved a cold storage facility at 67-69 Mandoon Road, Girraween, NSW — a 25,420-square-meter asset that exchanged contracts for $98 million, representing a 15% premium to its June 30, 2025 book value. According to Centuria, the Girraween facility had been earmarked for redevelopment when the REIT received an off-market offer, which the firm said highlighted owner-occupier demand for well-located assets.
In South Australia, Centuria divested a newly completed industrial development at 50-64 Mirage Road, Direk, SA for $50 million — a 33% premium to total project costs — delivering a 25% internal rate of return. Sales contracts were exchanged within weeks of the project achieving Practical Completion, according to the announcement.
Two additional assets rounded out the quarter's activity. A 12,825-square-meter warehouse at 32-54 Kaura Avenue, Edinburgh, SA exchanged for $22.7 million at an 8% premium to book value. A 9,371-square-meter distribution centre at 40 Scanlon Drive, Epping, VIC exchanged for $12.1 million at a 4% premium to book value.
Leasing Activity and Re-Leasing Spreads
Centuria reported 14,373 square meters of lease terms agreed across its portfolio during the third quarter of fiscal year 2026. Year-to-date re-leasing spreads averaged 36%, which the firm attributed to under-renting within the portfolio and prevailing market conditions in Australian industrial markets, particularly in infill locations.
Grant Nichols, CIP Fund Manager and Centuria Head of Listed Funds, said the results reflected the merits of the REIT's urban infill strategy. "The Australian urban infill industrial markets are characterised by land constraints, limited supply and high operator demand," Nichols said. "CIP maintains a strong bias towards these markets, with around 85% of its portfolio located in core urban infill markets. During this quarter, we have illustrated the merits of this strategy by securing significant sales premiums and leasing success."
Guidance and Financial Outlook
Centuria reaffirmed its upgraded FY26 funds from operations guidance range of 18.2 to 18.5 cents per unit, which the firm describes as reflective of the REIT's underlying and recurring earnings from operations. Distribution guidance of 16.8 cents per unit was also reaffirmed, expected to be paid in quarterly instalments. Both guidance figures remain subject to unforeseen circumstances and material changes in operating conditions, the firm noted.
Nichols added that the divestment metrics achieved during the quarter "more than reinforce CIP's net tangible assets," and said the REIT's current trading price "further highlights the disconnect to direct market pricing."
Looking ahead, Nichols cited macroeconomic uncertainty stemming from Middle East conflicts and global oil constraints as factors expected to impact inflation and construction price pressures, which he said are likely to curtail future industrial market supply. "The value of high-quality, existing infill industrial assets is expected to increase as the disconnect to replacement cost continues to escalate," he said.
Sources
Centuria Industrial REIT — Q3 FY26 Transactions and Leasing Update