ASX dividend shares are some of the best assets to own for passive income, in my view. There are few other types of investments that offer both a good yield and growth potential.
In this article, I'll highlight two businesses with pleasingly defensive earnings and resilient payouts.
I'm a fan of businesses that can offer stability in the face of economic uncertainty because it's at those times when we want the cash payments to continue flowing the most.
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Centuria Industrial REIT (ASX: CIP)
The first business I would like to highlight is a real estate investment trust (REIT) that owns a portfolio of high-quality industrial properties across Australia's major cities.
I really like the industrial property sector because of the tailwinds it's exposed to, providing strong support for rental income growth and capital growth. Tailwinds include e-commerce adoption, refrigerated space for food and medicine, data centres, population growth, and more.
This demand, and limited additional supply, has led to a very low vacancy rate in the industrial property sector. This is helping drive up the rental potential of the sector, which in turn benefits the ASX dividend share.
In the FY25 result, the business reported a pleasing increase in the right metrics. It revealed 5.8% like-for-like net operating income (NOI) and 2% distribution growth.
Further passive income growth is expected in FY26. Funds from operations (FFO) – net rental earnings – per unit is expected to grow up to 6% in the 2026 financial year, with distribution growth of 3% to 16.8 cents per unit. That translates into a forward distribution yield of 4.8%.
Centuria Capital Group (ASX: CNI)
The other business I want to highlight is the fund manager of Centuria Industrial REIT, which is called Centuria Capital Group.
While the REIT generates earnings from rental income, the fund manager makes money from managing the properties.
Centuria is a key beneficiary of RBA rate cuts because of how that can help its assets under management (AUM). A rate cut should, theoretically, boost the value of properties and increase Centuria's management fees and operating earnings.
Additionally, rate cuts should reduce the cost of debt, which is also a tailwind for Centuria's earnings.
Finally, the more supportive environment for properties could see investors want to give more money to Centuria to manage, further boosting FUM.
The ASX dividend share is targeting at least $1 billion of real estate acquisitions in FY26, with forecast operating earnings per security (EPS) growth of 10% to 13.4 cents per security. It expects to pay a distribution yield of 4.7% in FY26, at the time of writing.
