Centuria Industrial REIT (ASX: CIP) shares are sliding lower despite the company announcing its acquisition of a modern distribution centre on Monday. At the time of writing, the Centuria Industrial share price is edging 0.29% lower to $3.39. For context, the All Ordinaries Index (ASX: XAO) is currently trading 0.19% lower for the day so far.
Despite today’s slump, Centuria Industrial shares have increased by nearly 10% year to date and are within around 10% of their all-time record high of $3.75 set on 25 February 2020.
Centuria Industrial share price flat on acquisition news
The Centuria Industrial share price is languishing on Monday despite the company’s $27 million acquisition of a distribution centre located in the tightly held infill industrial market of Arndell Park in Central West Sydney. The property includes 9,400sqm of generic industrial space within a 1.9-hectare site.
Centuria fund manager Jesse Curtis commented on the company’s acquisition, saying:
The acquisition is CIP’s second strategic, infill Sydney industrial transaction within seven weeks having recently completed on a Bella Vista warehouse. The high-demand Arndell Park market is characteristic of limited warehouse stock and benefits from its infill location, close to major infrastructure.
It increases CIP’s exposure to Sydney’s central western industrial market and supports the REIT’s strategy of securing high-quality industrial assets within infill markets.
The latest purchase brings the company’s acquisitions throughout FY21 to 13 assets, worth a total of $784 million. To add some perspective, the company had a $2.4 billion portfolio value based on its half-year results announcement.
Quality tenants and earnings
According to Centuria Industrial, it has a simple strategy to deliver income and capital growth to investors from a portfolio of high quality Australian industrial assets.
The company focuses on quality tenants in reliable industrial real estate sub-sectors such as manufacturing, distribution centres, transport logistics and data centres.
In the company’s February half-year results announcement, it highlighted a 97.7% portfolio occupancy over the half, with less than 8.5% of the portfolio expiring in the 18 months to 30 June 2022.
This has translated into stable earnings and a 5.20% dividend yield. The Centuria Industrial share price didn’t see much action throughout January and February, but the company’s shares have surged some 13% since March 1.
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- Why the Centuria Industrial (ASX:CIP) share price is gaining today
Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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