Centuria Office REIT's Dividend Cut was Inevitable

Dow Jones
08/05

2239 GMT [Dow Jones]--The question was when, not if, Centuria Office REIT cut its dividend. That is Jefferies's view after Centuria Office REIT signaled its FY27 dividend would fall by 11% compared to a year earlier and its payout ratio would be rebased to 80% of funds from operations. Analyst Andrew Dodds says a forecast dividend of 9.0 Australian cents per unit suggests a payout ratio of 108% of adjusted funds from operations, assuming maintenance levels and leasing capex stay consistent in FY27. "In our view, this still doesn't appear sustainable against a backdrop of portfolio vacancy nearing 10%, metro office leasing incentives still in the high 30% range, and asset values continuing to fall," Jefferies says. It has a hold call on Centuria Office REIT.

 

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