Centuria Industrial REIT: Strength in Industrial Property Markets Continues

No-moat-rated Centuria Industrial REIT is benefitting from strong tenant demand for industrial space. In the fiscal year to date, new lease terms for 11% of the portfolio gross leasable area were agreed upon, with a very strong average rent growth of about 50%. Management thinks rents across the portfolio are about 30% below fair market rates, suggesting relatively strong market rent reviews will continue. Overall rent growth will be much more modest because rents on most of the portfolio grow at a fixed rate of just under 3% per year on average or with the Consumer Price Index. We forecast average rent growth of 6% per year on average for the medium term, but with rising debt costs, we forecast distributions per unit increasing just 1% per year.