Centuria Industrial REIT (ASX:CIP) share price lifts on valuation surge

The company’s shares are in the green.

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An industrial warehouse manager sits at a desk in a warehouse looking at his computer while the Centuria Industrial share price rises

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The Centuria Industrial REIT (ASX: CIP) share price is edging higher during early morning trade. This comes after the industrial real estate investment trust (REIT) announced a recently completed external revaluation of its portfolio.

At the time of writing, Centuria shares are up 1.51% to $4.04 apiece.

Centuria records strong asset value growth

Investors seem pleased with the company’s latest assessment, sending Centuria shares higher.

In today’s statement, Centuria advised that 66 investment properties, representing about 86% of its portfolio, have been externally valued.

The total value of its assets increased to $3.8 billion. This is a 9.6% or $281 million uplift from the prior book values. In addition, the growth reaffirms Centuria as Australia’s largest listed pure-play industrial REIT.

The biggest mover across its asset base is the Telstra Data Centre Complex in Clayton, Victoria. The facility’s worth jumped by $55 million or 11% as a value increase percentage to $560 million. Most of the other key valuation movers were in New South Wales, Western Australia, and South Australia.

Furthermore, Centuria noted that the total portfolio weighted average capitalisation rate (WACR) firmed to 4.20%. Pro forma net tangible assets (NTA) improved to $4.22 per unit (net assets less goodwill divided by number of units on issue).

Centuria fund manager Jesse Curtis commented:

CIP has achieved a strong valuation uplift throughout the past six months largely due to positive leasing activity across the portfolio, demonstrating our active approach to leasing. Tenancy demand continued to be driven by ecommerce growth and infrastructure investment across all major domestic markets during the 2021 calendar year.

During the period, the Australian industrial real estate market has continued to strengthen through capital value growth and yield compression. Sector tailwinds have attracted a significant wave of capital seeking to increase exposure to industrial assets. Investment activity, coupled with record low vacancy and robust tenant demand, is likely to drive strong rental growth resulting in continued appreciation of industrial asset values.

Centuria share price summary

It’s been a positive 12 months for Centuria shareholders, with the REIT shares surging 30% for the period. It’s worth noting that Centuria is closing in on its all-time high of $4.10 achieved in September this year.

Based on today’s price, Centuria has a market capitalisation of more than $2.55 billion. It has a tad over 632.91 million shares outstanding.

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