Centuria Office (COF) H2 2024 earnings summary

Executive summary

• FY24 funds from operations (FFO) were AUD 82.2 million or 0.138 per unit, and distributions were AUD 0.12 per unit, both in line with guidance.

• Portfolio occupancy was 92.5%–93% with a 4.3-year WALE, and 72% of income from government, ASX-listed, and multinational tenants.

• AUD 862 million of debt refinanced, AUD 139 million of non-core assets divested at or near book value, and no debt expiring before FY28.

• Portfolio is 93% A-grade, valued at AUD 1.9 billion, with a 5-star average NABERS energy rating and strong tenant covenants.

• FY25 FFO guidance is 0.118 per unit and DPU guidance is 0.101 per unit, reflecting ongoing market headwinds.

Financial highlights

• Gross property income was AUD 183.2 million, up 0.1% year-over-year, with like-for-like rent growth of 3%.

• FFO totaled AUD 82.2 million, down from AUD 93.0 million in FY23; FFO per unit fell to 0.138 from 0.156.

• Distribution payout ratio was 87%–87.2% of FFO.

• Net tangible assets (NTA) per unit declined to AUD 1.80 from AUD 2.20.

• Statutory net loss of AUD 168.7 million, mainly due to AUD 211.3 million loss on fair value of investment properties.

Outlook and guidance

• FY25 FFO guidance is 0.118 per unit and DPU is 0.101 per unit, with forecast yields of 9.5% and 8.1% respectively.

• Guidance assumes high cost of debt and no FY25 income from full-floor vacancies in Docklands, St Leonards, and Macquarie space at 85 Ann Street.

• Focus remains on maintaining high occupancy, improving portfolio quality, and proactive capital management.

• No current plans to reduce gearing below early 40% range; focus remains on debt covenant headroom.