Centuria Office REIT (ASX:COF) has announced its financial results for the 12 months ending in June, reporting funds from operations (FFO) of $70.4 million, or 11.8 cents per unit. This figure aligns with previous guidance but represents a decrease from the $82.2 million reported in the prior corresponding period. Distributions remained steady at 10.1 cents per unit.
The REIT experienced a portfolio valuation increase of $18 million during the second half, marking the first increase since FY22. Net tangible assets remained consistent at $1.67 per unit. Occupancy rates held firm at 91.2 per cent, with a significant 93 per cent of the REIT’s assets classified as A grade. Centuria Office REIT is a real estate investment trust that invests in Australian office properties. The company aims to provide investors with stable income and long-term capital growth through a diversified portfolio of high-quality assets.
Despite the positive portfolio valuation, Centuria Office acknowledged ongoing challenges within the metropolitan office leasing markets. According to Centuria Office fund manager Belinda Cheung, major occupiers are deferring decisions regarding their accommodation needs. This delay has resulted in extended downtime for vacancies, which continues to exert downward pressure on earnings. The REIT maintains a strong liquidity position, boasting $141.5 million in debt headroom, with no debt maturities scheduled before FY28. Furthermore, 81.5 per cent of the REIT’s debt is hedged.
Looking ahead, Centuria Office REIT anticipates FFO for FY26 to range between 11.1 and 11.5 cents per unit. The REIT projects distributions of 10.1 cents per unit, which implies a yield of 7.7 per cent.
