Centuria Industrial REIT (CIP)

Key points:

• 1H23 results in line and on track for CIP to deliver on FY23 guidance.
• Strong tailwinds in the industrial sector with CIP leasing spreads of +19% and high demand for well-located assets.
• Strong rent growth is negated by higher interest costs with a flow through to FY23/FY24.
• Core Property considers FY23 earnings guidance to be achievable with FFO per unit movement of -6.8% on FY22. Beyond this, FY24F is forecast to be -2.5% as we expect a moderation in lease spreads and interest rate movements.
• Despite an uncertain macroeconomic environment, the distribution yield of 4.9% provides relative resilience. HOLD.