Centuria Property Funds Limited (CPFL) which is an accountable entity of Centuria Metropolitan REIT (ASX: CMA), is happy to share an operating update of CMA for Q1 FY19. The expiry profile for FY19 is reduced by 20% as there was a lease agreed for 5% of the portfolio in the first quarter of FY19. The average rating of the NABERS energy got improved from 4 stars to 4.2 stars. The repositioning of the portfolio was done through the continuous transactional activities.
Doug Hoskins who is the acting Fund Manager at CMA said that in the first quarter the company has laid emphasis to take various approaches for active asset management. A further agreement was made for the 5% of portfolio lettable area in the first quarter of FY19. The lease which was made during Q1 of financial year 2018 was approximately 20% of the overall expiry profile for FY2019 and FY2020. This is due to the reason that the company is working continuously and proactively for the improvement of CMA’s expiry profile. As a result of continuous improvement in the quality of their portfolio, the average rating of NABERS energy got improved from 4.0 Stars to 4.2 Stars during the quarter.
CMA is continuously working on building up the quality office portfolio. For this the company is trying to acquire an A grade portfolio which is the subsidiary of Hines Global REIT Inc without any conditions. As a result of interest, the company acquired four high quality office assets in strategic metropolitan area worth $520.9 million. These acquisitions are highly complementary to CMA’s existing portfolio. Also, the settlement of 2 Kendall Street, Williams Landing, VIC is scheduled for the month of December 2018.
As per the suitable market condition, the process for selling the two industrial assets of CMA has begun. With regards to favorable market conditions and sales campaigns’ successful completion, CMA has also planned to provide its unit holder an investment opportunity in a quality pure play office portfolio. It is targeted in November 2018 to make divestment of 3 Carlingford Road, Epping, NSW.
As per Doug Hoskins, CMA’s management team commitment has led to the position of REIT with a 4.2 year WALE, occupancy of 98.8% and diversified income as a result of support from the quality tenants.
The company has shown a positive stock performance report of 18.35% since listing. In 6 months, the performance of the company is 6.96%, and the YTD result shows the performance of 1.19%. The 1 year report shows performance of 1.45%. For the period ended 30 June 2018, the company has generated revenue from continuing operations worth A$77.025 million. The net profit made by the company for the year was A$85.082 million. The company has strong potential to clear its long-term obligations. The total current asset of the company is A$57.243 million and total current liabilities are worth A$25.950 million. Thus, indicating company’s potential to clear its short-term obligations. The total shareholders’ equity is worth A$ 610.472 million. The net cash generated from the operations during the period was A$49.153 million. The cash used in investing activities were A$221.921 million. The major cash outflow was due to payments made for investment in properties worth A$231.929 million. The cash which was generated through financing activities amounted to A$183.559 million. As a result of this, the net cash and cash equivalent at the end of the period was A$18.978 million.
The current market price of the share is A$2.425 with market capitalization of A$585.13 million and PE ratio of 6.44x. If we see the stock performance, the moving average convergence and divergence line (MACD line) is trending below the signal line.
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