The ASX dividend stock Centuria Industrial REIT (ASX: CIP) has fallen 16% since November 2025 and it's down 28% from December 2021, as the chart below shows.
The business describes itself as Australia's largest domestic pure play industrial real estate investment trust (REIT).
It says it has a portfolio of high-quality industrial assets which are located in key metropolitan locations throughout Australia. It aims to offer investors a mixture of passive income and capital growth.
Higher interest rates are certainly a headwind for the business, but I think rates will only be this high for a certain period of time, so it looks like the right time to scan for opportunities in the REIT space. Centuria Industrial REIT looks like one of the best options to me.
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Solid dividend yield
The business expects to pay a pleasing distribution for FY26 and I expect the FY27 payout will be a similar amount.
It expects to pay an annual distribution of 16.8 cents per unit in FY26, which would mean a 3% rise year-over-year. This guided payout translates into a distribution yield of 5.6%.
But, the current distribution yield is not the key reason why I think it's a wonderful time to invest right now.
Cheap valuation
I love buying assets for less than they're worth. Every six months, this ASX dividend stock tells investors about the underlying value of its business with the net tangible assets (NTA) – that takes into account the property values, the loans and other assets and liabilities.
At 31 December 2025, the business reported a NTA of $3.95. It's trading at a 24% discount to that latest NTA update, so it looks very cheap.
It also noted in its FY26 third-quarter update, it enacted $188 million of divestments, achieving an average premium to book value of 18%. Since FY23, it has sold close to $460 million of assets at an average premium to book value of 12%.
So, not only is it trading at a large discount to the NTA, but that NTA may be understated as well.
Excellent rental tailwinds
I think the business has a very promising earnings growth future, which is absolutely key in my opinion.
Industrial properties are in high demand and there's limited space to put more in across key metropolitan locations. This is helping drive the rental value of the existing real estate significantly.
Centuria Industrial REIT benefits from significant demand from areas like e-commerce and data centres. Plus, it's seeing a big jump in rental income as contracts come up for renewal.
The fund manager of the REIT, Grant Nichols, explains the positive dynamic for the business:
Looking ahead, we foresee the domestic infill industrial market's supply-demand imbalance to persist with limited construction of new warehouses coupled with consistently high occupier demand as tenants look to strengthen their delivery times and reduce transport costs. Current macroeconomic uncertainty, resultant of the Middle East conflicts and global oil constraints, is impacting inflation and construction price pressures. These factors are expected to curtail future industrial market supply. The value of high-quality, existing infill industrial assets is expected to increase as the disconnect to replacement cost continues to escalate.
Overall, the ASX dividend stock looks undervalued with an appealing future of earnings growth, which should help drive the rental income higher.
