Profits more than triple as Centuria snaps up property

Profits more than triple as Centuria snaps up property

Property investment manager Centuria (ASX: CNI) witnessed significant growth in 1H20 on the back of major acquisitions.

The company saw its figures rise across the board, with revenue up 54 per cent to $80 million and statutory NPAT up 251 per cent to $78 million.

Centuria enters the second half of FY20 with $7.3 billion in assets under management (AUM), propped up by $1.2 billion of organic real estate acquisitions in 1H20.

Recurring revenues accounted for 73 per cent of total group revenue in 1H20, underpinned by larger property funds management fees and co-investment income.

The group expects its FY20 results will reflect 80 to 85 per cent recurring revenues.

Centuria joint CEO John McBain says the first half was a transformational period for the group.

"The business continues to focus on a dual strategy of organic and inorganic expansion and HY20 was a record period with $1.2bn of organic real estate acquisitions across our listed and unlisted divisions," says McBain.

"Centuria's platform remains well positioned to service unlisted and listed growth opportunities across what we consider to be the most attractive real estate sectors."

Acquisitions were the cornerstone of the group's strategy during the half; Centuria's real estate division expanded to $6.4 billion AUM and its listed vehicles (Centuria Office REIT and Centuria Industrial REIT) acquired nine assets for $935 million.

In the group's unlisted division Centuria established two new single asset unlisted funds worth $216 million and its open-ended diversified fund increased its AUM by 74 per cent to $207 million, underpinned by two real estate acquisitions for $93 million.

"Our record half of $1.2 billion in organic acquisitions is a strong reflection of our real estate team's ability to efficiently identify and execute acquisition targets and leverage our retail and institutional distribution channels," says McBain.

"These acquisitions further improve Centuria's recurring revenue streams, which have been complemented by strong performance fees for the period."

Centuria recently announced its proposal to acquire 100 per cent of New Zealand listed real estate funds management company Augusta Capital for $174 million.

The Australian group today announced that it has received over 36 per cent pre-bid support from major Augusta shareholders. If Centuria is successful with the takeover it would expand its AUM by $1.9 billion to $9.2 billion.

Shares in Centuria are up 0.8 per cent to $2.53 per share at 10.48am AEDT.

Real estate hot property on the ASX

Real estate investment managers have been performing well across the board so far this reporting season.

Charter Hall released the results for its listed social infrastructure real estate investment trust (REIT) (ASX: CQE) today, with earnings up 20.3 per cent to $25.5 million and a statutory profit of $49 million, up 16.1 per cent.

A heavy acquisition strategy also paid off for Charter Hall's Long WALE REIT (ASX: CLW) on Monday, securing the trust a 206.5 per cent increase in its first half profits.

Similarly, SCA Property Group (ASX: SCP) was buoyant on acquisitions in 1H20, seeing a 129.5 per cent jump in NPAT to $90.2 million. An increase in property valuations certainly pushed that result along too.

GPT Group (ASX: GPT) did not see the growth its counterparts witnessed during 1H20, however that can largely be attributed to a $910.7 million property revaluation boost achieved in 2018.

The company did manage to notch a $342.2 million net valuation gain last year, but NPAT declined by 39.4 per cent to $880 million.

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