Centuria Office REIT Completes AU$225M Debt Refinance and Divests Property

Centuria Office REIT (ASX: COF) has successfully refinanced AU$225 million of debt, which includes AU$50 million in additional liquidity. The refinancing extends the debt expiry to FY26 and increases the Weighted Average Debt Expiry (WADE) to 3.2 years. COF maintains a diverse group of six lenders. Despite higher interest rates, COF's cost of debt is expected to remain elevated compared to previous periods. Grant Nichols, COF Fund Manager, attributes the lender's support to the REIT's high-quality portfolio, including a high occupancy rate of 97.3%, a staggered Weighted Average Lease Expiry (WALE) of 4.1 years, and an average building age of approximately 17 years.

Additionally, COF has exchanged a sales contract to divest 54 Marcus Clarke Street in Canberra for AU$23.0 million, representing a slight discount to the book value. The property was originally purchased in 2015 for AU$14.2 million and has generated significant income returns, with over AU$7.0 million earned during the ownership period, reflecting an approximate internal rate of return (IRR) of 11%. This divestment will enhance the overall asset age and quality of COF's portfolio. The proceeds from the sale will be used to repay debt, with the settlement expected in 2024.

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