Centuria, Dexus Industria Profits Up as Headwinds Strengthen

Centuria Capital Group is looking to grow its $20-billion property platform with a strategy of “evolution through diversification” amid strengthening economic headwinds.

The ASX-listed fund manager is focused on future-proofing its expansion by riding strong investor demand in the alternative healthcare, agriculture and non-bank lending sectors.

But in the face of “variable market conditions” it expects value opportunities will also emerge in its traditional asset classes.

“We are cognisant of rising inflation and a higher interest rate environment,” said Centuria’s joint chief executive Jason Huljich, announcing the company’s full-year results.

The company has reported an operating profit after tax of $114.5 million for the 2022 financial year, up from $70.2 billion the previous year.

It credited the ongoing diversification of its platform to helping it achieve “considerable scale” enabling it to deliver the strong results—with its assets under management growing 18 per cent to $20.6 billion.

Centuria’s real estate funds management platform expanded to $19.8 billion—two-thirds ($13.billion) across unlisted funds and one-third ($6.8billion) across listed funds.

“The group continued to expand its scale throughout FY22 with a record number of transactions, totalling $3.1 billion,” Huljich said.

“This growth is attributed to our diversification by geography, asset class, fund types and capital sources, which continue to generate new opportunities for sustainable and long-term expansion.

“Centuria’s development pipeline also significantly contributed to recurring revenues while providing high quality assets for our listed and unlisted funds in Australia and New Zealand.”

Joint chief executive John McBain said the group had delivered record operating earnings and distributions throughout the period, following upgraded guidance during the year. 

“Centuria demonstrated how its corporate acquisitions in previous periods have significantly increased the size of the platform with correspondingly high increases in both management fee revenues (up 77 per cent to $146.8 million) and transaction fee revenues (up 162 per cent to $39.3 million).

“These acquisitions allowed the group to diversify across several additional asset classes as well as the West Australian and New Zealand geographies, delivering strong growth.

“This has occurred despite the backdrop of rising inflation, Covid lockdowns and geopolitical events.”

▲ Jandakot Airport industrial precinct— Dexus Industria acquired a 33.3 per cent stake in the asset during the year.

Meanwhile, the listed Dexus Industria REIT has reported a statutory net profit of $169.4 million, up 42.1 per cent ($50.2 million) on the previous year.

The increase was primarily driven by valuation gains on investment properties on a look-through basis of $100.3 million, which were $22.0 million higher than FY21.

Its funds from operations were up almost 30 per cent to $53.6 million and record leasing activity was achieved, with 70,600sq m completed, as well as 20,000sq m of development leasing.

During the period the portfolio grew from 39 properties valued at $1.1 billion to 94 properties valued at $1.7 billion. 

Dexus Industria fund manager Alex Abell said the acquisitions during the period, including the 33.3 per cent stake in Jandakot Airport industrial precinct, also improved the portfolio quality and enhanced the growth profile over the medium term.

“We have progressed on our strategy to leverage Dexus’s integrated real estate platform to execute our vision,” he said.

“The portfolio is well positioned towards the industrial and logistics sectors, which continues to strengthen with vacancy less than 1 per cent across the major markets driving high rental growth.

“This provides opportunities to add value through existing assets and new development throughout our portfolio over the coming years.”