Centuria Industrial REIT Lowers Exchange Price on A$325 Million Exchangeable Notes After Extraordinary Distribution Announcement

Mechanics of CIP Funding Pty Limited’s A$325 Million Exchangeable Notes

CIP Funding Pty Limited, a wholly owned subsidiary of Centuria Property Funds No. 2 Limited, acting as the responsible entity of Centuria Industrial REIT, issued A$325 million of 3.50% Exchangeable Notes due 2030. Identified by ISIN XS3170817665 and Common Code 317081766, these hybrid debt instruments may be exchanged into REIT units at a predetermined exchange price under specified conditions. Such instruments enable listed trusts and companies to raise capital from institutional and offshore investors at competitive rates while offering potential equity-linked upside.

The exchange price determines the conversion rate of notes into CIP units. When extraordinary distributions—those outside routine income payments—are made to unitholders, the notes’ terms require a downward adjustment of the exchange price to reflect the economic impact on unit value. This mechanism protects noteholders from dilution and is standard in exchangeable and convertible note structures.

Extraordinary Distribution of A$0.042 per Unit Prompting Exchange Price Adjustment

The exchange price reset was triggered by an extraordinary distribution of A$0.042 per unit declared by Centuria Industrial REIT, payable on 14 August 2026 to unitholders recorded on 30 June 2026. The company’s update did not specify the distribution’s origin—such as a property sale or capital return. Investors seeking further details should consult CIP’s periodic disclosures on the ASX platform.

Extraordinary distributions typically arise from non-recurring events like asset disposals or capital releases and fall outside regular distribution schedules. Under Conditions 6(a) and 6(b)(iii)(B) of the notes, such distributions activate the adjustment clause requiring the Calculation Agent to recalculate the exchange price, ensuring fair economics for noteholders after the value transfer.

Revised Exchange Price Reduced from A$3.9383 to A$3.8845

The Calculation Agent has lowered the exchange price from A$3.9383 to A$3.8845 per unit, effective 29 June 2026—one day before the 30 June 2026 record date for the extraordinary distribution. The approximate A$0.054 reduction aligns with the A$0.042 distribution amount, with minor deviations due to the formula prescribed in the notes’ terms.

A lower exchange price benefits noteholders economically by increasing the number of CIP units received upon exchange, preserving their relative value despite the distribution. This adjustment is formula-driven under Conditions 6(a) and 6(b)(iii)(B) and is not at the issuer’s discretion.

Conditions 6(a) and 6(b)(iii)(B): Governing the Exchange Price Adjustment

The exchange price adjustment is governed by Conditions 6(a) and 6(b)(iii)(B) of the Exchangeable Notes’ terms and conditions. Though the company update did not reproduce these clauses, they typically specify when adjustments are triggered, including for extraordinary distributions, and detail the calculation method. An independent Calculation Agent applies this formula to determine the revised price.

Noteholders and advisers are advised to review the full terms and conditions to verify calculations and understand their rights. The update directs noteholders to the notes’ documentation for definitions of capitalized terms. Institutional investors should consult these documents alongside the notice to assess the adjustment’s impact.

CIP’s Position as Australia’s Largest Pure Play Industrial REIT and Implications for Noteholders

Centuria Industrial REIT is Australia’s largest domestic pure play industrial REIT and a component of the S&P/ASX 200 index. Its portfolio comprises high-quality industrial properties in key metropolitan locations across Australia, supported by a diversified tenant base. This scale and diversification provide important context for noteholders evaluating the credit quality and unit price stability underlying their exchange rights.

The trust is managed by Centuria Property Funds No. 2 Limited, a wholly owned subsidiary of Centuria Capital Group (ASX:CNI), which managed approximately $21.8 billion in assets as of 31 December 2025. Centuria Capital Group’s platform includes listed REITs, unlisted real estate funds, and investment bonds. The size and institutional backing of the manager is a key factor institutional noteholders consider when assessing ongoing distributions and the viability of the exchange mechanism.

Distribution Restrictions and Jurisdictional Limitations on the Exchangeable Notes

The company update includes standard distribution restrictions for cross-border debt instruments. The notes are not registered under the United States Securities Act and the notice prohibits release, publication, or distribution in the United States, the European Economic Area, or the United Kingdom. These restrictions comply with international capital markets regulations governing offshore issuances by Australian entities.

Such jurisdictional limitations are routine and do not indicate adverse developments. The notice is intended for institutional noteholders involved in the original issuance, not Australian retail investors.

Upcoming 14 August 2026 Distribution Payment Date

The key upcoming date for unitholders and noteholders is 14 August 2026, when the A$0.042 extraordinary distribution will be paid to unitholders recorded on 30 June 2026. For noteholders, the exchange price adjustment effective 29 June 2026 has already accounted for this distribution, aligning their exchange rights with the post-distribution unit economics.

Investors may await further disclosures from Centuria Industrial REIT clarifying the extraordinary distribution’s source and rationale. Additional information—especially if related to significant asset transactions or capital management—could affect the trust’s asset base, gearing, and future distribution outlook. No further details were provided in this update.

Insights into CIP’s Capital Management and Investor Communications

The formal noteholder notice following the extraordinary distribution highlights CIP’s disciplined capital management and investor communication practices. The use of exchangeable notes alongside traditional debt and equity financing reflects a sophisticated capital structure strategy typical of larger ASX-listed REITs aiming to diversify funding and investor bases.

The formula-driven adjustment administered by an independent Calculation Agent ensures transparency and predictability for noteholders. It also demonstrates CIP’s commitment to equitable treatment of all capital structure stakeholders, beyond just unitholders. The timely release of this notice aligns with CIP’s continuous disclosure obligations.

Investor Relations Contacts Managing Communications on the Exchangeable Notes

The update was authorized by Anna Kovarik, Company Secretary of Centuria Industrial REIT. Investor inquiries have been directed to Grant Nichols, CIP Fund Manager; Tim Mitchell, Group Head of Investor Relations at Centuria Capital Limited; and Alexandra Koolman, General Manager of Communications at Centuria Capital Limited. All are reachable via Centuria’s head office at 02 8923 8923.

The involvement of the Fund Manager in communications underscores Centuria’s focus on maintaining open dialogue with institutional stakeholders, particularly regarding technical notices. Noteholders or market participants seeking clarification on the exchange price adjustment, extraordinary distribution mechanics, or note conditions are encouraged to contact the investor relations team for further information.