Centuria Industrial REIT Shares Up on Warehouse Acquisition (ASX:CIP)

Centuria Industrial REIT Shares Up on Warehouse Acquisition (ASX:CIP)

Shares in the Centuria Industrial REIT [ASX:CIP] are trading slightly higher today after the fund announced it will acquire a new warehouse in north western Sydney.

At time of writing the CIP share price is up 0.33% to trade at $3.00 per share.

ASX CIP Share Price - Centuria Industrial REIT Chart

Source: Tradingview

The global pandemic has beaten down many of Australia’s listed Real Estate Investment Trusts, particularly those focused on retail spaces.

CIP, however, is focused on industrial assets situated in infill locations and is exposed to the booming e-commerce and food delivery industries.

So, with the economy gradually building up steam, can we expect to see a return in the CIP share price?

A bumper year ahead

In its interim results released earlier this month, CIP set the tone for what is expected to be a bumper year for the industrial property sector after upgrading its full-year earnings guidance.

On the back of surging e-commerce and strong demand for specialist cold-storage facilities, CIP acquired almost $700 million of assets over the six months to December.

And their latest acquisition will now bring that figure to $757.2 million after the trust acquired a further $37.3 million of assets in Melbourne earlier this year.

Today, the REIT announced the acquisition of a modern warehouse, located in the infill industrial market of Bella Vista in north western Sydney for $26.25 million.

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CIP’s new digs were acquired off-market on a short 0.5-year Weighted Average Lease Expiry.

The property provides a 7,678sqm warehouse and 591sqm modern office, with less than 50% site coverage.

Meaning there is significant potential to expand on the site.

CIP Fund Manager Jesse Curtis said:

This acquisition increases CIP’s exposure in the tightly held Sydney industrial market. Being a high-profile location, in a true infill area, the asset will appeal to a broad range of potential users.’

In fact, with 1.2 million households situated within a 60-minute drive of the property, there could be serious value for many types of users.

What about the CIP share price?

The CIP share price has currently regained about half of the losses it made due to the pandemic-induced market crash last year.

Albeit quite slowly.

And going off the chart, there looks to be downwards momentum gripping CIP shares at the moment.

But with a 19.2% growth in revenue during 1H FY2021 and a 216% increase in statutory profit, there is potential we could see that momentum swing in favour of CIP throughout the year.

Though property is typically a long-term investment, therefore looking only 12 months ahead won’t give you the full picture. Instead, cast you eye ahead five years. Australian real estate expert Catherine Cashmore reveals why she thinks we could see the biggest property boom of our lifetimes — over the next five years. Click here to learn more.


Lachlann Tierney

For The Daily Reckoning Australia