Improved employment rate boosts Centuria Office REIT
Strong operating metrics and continued leasing momentum across a portfolio as well as tenants switching to newer and more efficient buildings has seen Centuria Office REIT (COF) statutory net profit grow to $63.6 million for the period ended 31 December 2021.
Centuria Office REIT fund manager and Centuria’s head of office, Grant Nichols, said the quality of COF’s portfolio increased through the strategic acquisition of two high-quality modern office buildings, within key Melbourne and Sydney near-city and metropolitan locations, for a combined value of $273 million.
He said that the fund was also helped by the fact that tenants were increasingly seeking new, efficient and sustainable buildings that offered quality internal and surrounding amenity, which were, according to Nichols, the fund’s portfolio typical characteristics.
During HY22, funds from operations stood at $54.7 million and distributions were in line with FY22 guidance provided.
The Centuria Office REIT also posted 97.8% average rent collection throughout HY22 and raised $201 million of equity and an additional $100 million was added to its debt facilities during the period.
“Though COVID-19 continues to impact office markets, Australia has one of the highest vaccination rates in the world, with one of the lowest mortality rates. Backed by the strength of the Australian economy, we expect to see tenant demand for Australian office improving throughout 2022,” Nichols concluded.
“In recent months, Australia has benefited from an uptick in white collar employment, with Australia’s unemployment rate at its lowest level in 13 years. This improvement in employment levels has translated into stronger tenant demand for office accommodation with 185,000 sqm of positive net absorption across Australian office markets in the three months to 31 December 2021.”
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