Why shares in this ASX REIT are climbing higher today

Shares in Centuria Metropolitan REIT (ASX: CMA) are climbing higher today after a strong half-year result from the Office REIT.

Centuria Metropolitan REIT (ASX: CMA) shares are climbing higher today after a strong half-year result from the ASX REIT.

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What did Centuria Metropolitan report today?

Centuria Metropolitan REIT reported total group assets under management (AUM) of $2.1 billion for the half-year ended 31 December 2019. That represents 28.77% of the Centuria Group AUM as the biggest individual portfolio.

Shares in the ASX REIT are climbing higher today after reporting an 11.2% 12-month return on equity. Overall, Centuria Metropolitan delivered a 30.7% 12-month total unitholder return.

Portfolio occupancy sat at 99.2% on a portfolio value of $2.1 billion. That portfolio includes 23 pure-play office assets across Australia with an average age of 14.9 years.

The Commonwealth Government is the REIT's largest tenant and represents 13.3% of earnings. 75% of total income is derived from multinational, ASX and government tenants.

The ASX REIT's shares are climbing higher this morning following the solid 1H 2019 result. Gearing reduced to 33.2% during the year with a weighted average debt expiry of 3.8 years.

FY 2020 funds from operations (FFO) guidance is at 19.0 cents per unit (cpu). Centuria Metropolitan also reaffirmed its distribution guidance of 17.8 cpu this morning.

How are the ASX REIT's shares responding?

Centuria Metropolitan also climbed into the ASX 300 after strong share price growth in recent months.

The office REIT's net tangible assets (NTA) per unit climbed to $2.57 compared to $2.49 in FY 2019. The portfolio value has now increased by 50% with the addition of 3 new assets during the year.

Shares in the ASX REIT are now up more than 20% in the last year as its market capitalisation has climbed to $1.52 billion. Centuria Metropolitan REIT is trading at $2.96 per share this morning following the sold half-year result.

It's a similar story for Centuria Industrial REIT (ASX: CIP) after a strong half-year result of its own. The Industrial REIT's AUM climbed to $1.6 billion with a total unitholder return of 29.1% in the last 12 months.

Foolish takeaway

ASX REIT shares have had a good start to the February reporting season. SCA Property Group (ASX: SCP) climbed higher yesterday after its earnings release but there are still more to come.

Mirvac Group (ASX: MGR) and DEXUS Property Group (ASX: DXS) are two big names set to release their results on Friday.

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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