Centuria Capital (ASX:CNI) share price slides amid $72m acquisition update

The funds manager’s share price finished the day lower on acquisition news.

| More on:
A middle-aged woman sits in contemplation over a tablet device considering information about ASX shares and deep in thought.

Image source: Getty Images

The Centuria Capital Group Ltd (ASX: CNI) share price edged lower on Monday and finished 2.1% in the red at $3.26.

Centuria shares dropped during the day despite the company announcing a key acquisition update.

Here are the key points from Centuria’s announcement.

What did Centuria Capital announce?

The company advised that its subsidiary Primewest secured a $71.2 million shopping centre in Geraldton, Western Australia.

Geraldton is a major regional gateway town in WA. The Northgate Geraldton Shopping Centre – Centuria’s asset from the purchase – is the dominant shopping centre in the area.

The city itself is supported by mining, broadacre agriculture, aquaculture fishing, tourism and logistics industries, which Centuria sees as positives for its new asset.

The announcement notes that anchor tenants Kmart and Coles contribute 49% of the gross rental income at the site with the former recently commencing a new 10-year lease.

Including other tenants at the centre, the site “provides a 4.7 year weighted average lease expiry (WALE) and is 96.3% occupied”.

Centuria, via Primewest, secured the site for “a new single-asset, unlisted closed-ended wholesale fund”.

The Northgate Geraldton Trust (NGT) has an initial 5-year term and will be open to wholesale investors from 13 October.

It forecasts a 7.25% distribution within the first 2 years and has a target equity raise of $41.8 million.

What did management say?

Speaking on the announcement, Centuria joint CEO Jason Huljich said:

The acquisition illustrates how Centuria’s larger balance sheet can support the team’s expansion across large format and neighbourhood retail markets by securing quality, well performing assets. It adds to the Group’s strong retail real estate portfolio, totalling more than $2.6 billion.

Touching on the development area itself, Huljich added:

This is a rare opportunity to secure a retail asset that’s strategically located within WA’s fourth most populated area. It benefits from strong tenant covenants with 80% of the property’s gross income derived from ASX-listed, national and multinational tenants.

Centuria Capital share price snapshot

The Centuria Capital share price has slumped 6% into the red this past month but is still up 24% this year to date.

It’s also gained 47% over the past 12 months, more than double that of the S&P/ASX 200 Index (ASX: XJO)’s approximate 20% return in this time.

Should you invest $1,000 in Centuria Capital Group right now?

Before you consider Centuria Capital Group, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Centuria Capital Group wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers