Company Interview / Centuria Office REIT optimistic as rates ease

Key points:

Centuria Office REIT (ASX:COF) delivers $70.4 million funds from operations, with distribution and valuation growth returningPortfolio sees 91.2% occupancy and 24,000m² of new leases, notably in Brisbane and other metropolitan marketsSustainability is emphasised through light-touch refurbishments and retention of fitoutsAnticipation of further interest rate cuts expected to boost transaction activity and property sector optimism

Centuria Capital Group’s Belinda Cheung provides an update on Centuria Office REIT (ASX:COF), which has reported funds from operations of $70.4 million, or 11.8 cents per unit, for the full year, aligning with guidance but down from $82 million last year. Distributions sit at 10.1 cents per unit while the portfolio’s second half saw an $18 million valuation increase, representing the first period of growth since FY22. Net tangible assets remain steady at $1.67 per unit. Cheung identifies a milestone in valuation growth after several challenging years, attributing it partly to limited new office supply and increased conversions of lower-grade offices into residential or build-to-rent projects.

Cheung highlights that Centuria’s portfolio, with significant exposure to metropolitan and near city markets across Australia—including Brisbane, Perth, Adelaide, and Canberra—has experienced strong leasing and valuation stabilisation, especially in Brisbane. The REIT completed 24,000m² of leasing in FY25, about 9% of its total portfolio, and now records 91.2% occupancy, significantly outpacing the broader metropolitan market. Cheung attributes this to the portfolio’s high-quality, conveniently located assets with ample parking and transport connectivity.

Looking ahead, Cheung prioritises sustainability-focused leasing strategies, maintaining existing fitouts when possible, and notes a strong tenant preference for ready-fitted spaces. Anticipated interest rate cuts are expected to improve financial feasibility and transaction volumes over the next year.