Company Interview / Selling property at a premium while shares trade at a discount

Key points:

FY26 results: 4% per unit earnings growth, and 30% re‑leasing spreadsAsset sales at 17% premium to book while CIP trades at ~25% discount to NTA support buybacksStrategic focus on urban infill industrial land and data centre conversions for potential NTA upside

Centuria Industrial REIT lifts earnings, flags upside from data centres and buyback strategy, Grant Nichols Head of Listed Funds, Centuria sets out a positive view on Centuria Industrial REIT (ASX:CIP), highlighting FY26 funds from operations of $114.1 million, up 4% per unit to 18.2 cents, and guidance for FY27 earnings growth of up to 5.5%. Distributions are guided to 17.3 cents per unit, with forecast earnings of 18.8–19.2 cents per unit. Nichols attributes the result to strong leasing activity over several years, with FY26 re‑leasing spreads averaging 30%, which he says drives solid income and earnings growth.

Nichols points to $200 million of asset sales at a 17% premium to book value while CIP trades at an almost 25% discount to net tangible assets of $4.01 per unit. He sees this as a “very significant disconnect” and an arbitrage opportunity, supporting the case for on‑market buybacks funded by asset disposals.

Industrial property fundamentals are described as robust, with national industrial vacancy below 4% and ongoing rent reversion. Nichols is particularly focused on urban infill industrial land suited to data centres, seeing value uplift if planning and power approvals are secured. He argues industrial locations reduce community pushback and already benefit from existing power infrastructure.