Centuria Industrial REIT (ASX: CIP) could be one of the top ASX dividend stocks to own in almost any market.
I think it works in both economic boom times as well as more challenging economic conditions.
The real estate investment trust (REIT) owns a portfolio of more than 80 assets that has a value of close to $4 billion. Its portfolio of industrial assets is constructed to attract some of Australia's best industrial tenant customers.
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Excellently located properties for high-quality tenants
Around 85% of the portfolio is located in strategic infill locations, providing tenants with proximity to customer bases and a reliable, skilled workforce.
These locations are in high demand, leading to a low vacancy rate for the portfolio and the industrial property sector as a whole.
Its top seven tenant customers by income are: Telstra Group Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW), Arnott's, AWH, Visy, Fantastic Furniture, and Green's General Foods. As you can see, they're large businesses, which makes for reliable tenants, even during weak economic times.
The business has a weighted average lease expiry (WALE) of more than six years, which means there is a lot of rental income already locked in for the foreseeable future.
Strong rental income potential
I think one of the best signs of a quality REIT is that it's experiencing solid rental growth, which I think is the key driver of both the property values and rental profit.
The REIT gives investors exposure to e-commerce, data centres, and cold storage (for food and medicine). Each of these is a solid growth area for the ASX dividend stock's rental income.
The low vacancy rate and strong demand for industrial properties are helping increase its like-for-like income over time. In the FY26 first half, it reported 5.1% like-for-like net operating income (NOI) growth.
It also reported in the third quarter of FY26 that re-leasing spreads came to 36%. That means the rental income is 36% higher on the new rental contract compared to the older rental contract.
That re-leasing spread also suggests the portfolio is still 'under-rented', meaning its rental income growth could be stronger-than-average in the next few years.
Industrial properties in well-located locations should always be in demand, making this a compelling option.
Strong dividend payouts
Considering the strong rental income growth, I think the business is heavily undervalued and offers great passive income.
At the time of writing, Centuria Industrial REIT is trading at a discount of 24% compared to its net tangible assets (NTA). Due to that large discount, its distribution yield is pleasing for this growing business.
Its FY26 payout of 16.8 cents translates into a distribution yield of 5.6%, and I'm expecting further payout growth in the years ahead, driven by the rental income growth I've outlined above.
Plus, any future interest rate cuts should help lower the cost of debt, boost rental profits, increase property values, and help fund larger payouts.
Of course, this isn't the only ASX dividend stock I'd buy for passive income.
