Morningstar upgrades Centuria Industrial REIT
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The news: Morningstar has upgraded property investor Centuria Industrial REIT, citing improving financial health on the back of growing rents and non-core asset sales.
The numbers: Morningstar upgraded Centuria to a ‘medium uncertainty’ rating from ‘high uncertainty’ previously, but left its fair value estimate unchanged at $3.50 a share.
Centuria Industrial shares edged 0.17% higher at $2.98 in early trading on the ASX.
The context: Morningstar analyst Adrian Atkins said Centuria has a favourable rental outlook, with its rents about 30% below fair market rates on average. The research house expects strong revenue growth as 40% of the trust’s leases expire over the next four years and rents catch up to the market.
The analyst also backed three property sales in recent months for $88 million, with the proceeds mostly going to reduce debt. It expects the net debt to earnings ratio to improve to seven times in FY25, from more than eight times in FY24.
The source: Morningstar research
