Property fund manager Centuria flags $1.5b in floats as upswing begins
Fund manager Centuria Capital hopes to float three new vehicles – a private credit trust along with two property funds – by the end of the year, in a $1.5 billion ambition to tap the turn in property markets.
The confidence that investors are swinging back towards real estate stocks comes as interest rates fall in Australia and New Zealand, where Centuria also has exposure, its joint chief executives John McBain and Jason Huljich told The Australian Financial Review on Thursday.
Centuria has about $20.5 billion in funds under management, through a combination of two already listed funds, an array of unlisted vehicles and single asset funds, along with its credit business, Bass. Its property portfolio ranges from office, industrial and retail assets though to healthcare and agriculture.
The fund manager is already seeing capital flowing back rapidly into its unlisted offerings, with investors chasing better yields as interest rates fall, crimping the returns from fixed interest products.
“In [the] unlisted [sector], it happens real quick,” McBain said.
The Centuria chiefs cited a recent $26 million raising for the expansion of one of the largest distribution centres in New Zealand’s South Island – offering a yield of 7.35 per cent – which closed five weeks early, heavily oversubscribed.
As well, there is already strong interest in a separate raising being prepared for a $115 million retail centre in Brisbane, offering an 8 per cent yield, they said.
“We’re seeing those unlisted investors come back into market and look for product, and we’re starting to see that in Australia now,” Huljich said.
“We’re seeing that inflection point where values have stabilised, interest rates are reducing and investors are flowing back into unlisted funds which is great to see.”
Such investor interest will also make its way to the public market, where capital raisings and floats have been relatively few in the property sector since the post-pandemic rise in rates weighed on listed stocks. That is beginning to shift, however, with Goodman this month launching a $4 billion raising, following the $2 billion DigiCo float just before Christmas.
Centuria hopes to float a $300 million to $500 million private credit vehicle, with much of its lending focused on residential development, as a listed investment trust. Two more sector-specific real estate investment trusts IPOs, each worth $500 million or more, could follow before the end of the year.
The fund manager is also diversifying into data centres, taking a stake in operator ResetData which is tapping demand from corporate clients for AI infrastructure, including clusters of Nvidia chips, with the launch of what it calls Australia’s first sovereign public AI factory.
The upbeat note came as Centuria reported a slight tick up in its 2025 interim operating profit after tax of $51.1 million or 6.2¢ per security. An interim distribution of 5.2¢ was declared. Centuria has reaffirmed its full-year operating profit guidance of 12¢ and distributions of 10.4¢.
