Better late than never. Todays announcement is a good one. They've managed to divest assets at a yield below CIP's marginal cost of debt.

They also seem to have kept effective control of the assets as well, which is a positive. Hopefully management stay somewhat disciplined. Wouldn't mind seeing a few more divestments.

• Strategic partnership formed with an investment vehicle sponsored by Morgan Stanley Real Estate Investing to acquire a c.50% interest in a portfolio of eight existing CIP assets realising $181m1 , reflects a 4.7% divestment yield

• Sale proceeds to reduce debt and strengthen balance sheet • HY23 portfolio valuations: 47bps portfolio capitalisation expansion to 4.66%, 1.9% reduction in valuations2 o Rental growth substantially offsetting capitalisation rate movement

• 31% proforma gearing3 reduced from 33.2% at 30 June 2022, $4.11 per unit proforma NTA3

• 79% of debt funding interest rates now hedged4

• Reaffirmed FY23 FFO guidance of 17.0cpu and distribution guidance of 16.0cpu

Centuria (CNI) has a little-known listed bond on issue - C2FHA.

Some surface level info:

The security pays a floating coupon of BBSW + 4.25% (Currently close to 7%).

Guarantors:

Security: Secured over assets held in a certain subsidiary. Currently circa 35% (although there is more leverage on look through basis). Covenant is 65%.

The guarantor's (CNI) balance sheet gearing is circa 15% and ICR is over 6 times, with FFO expected to increase YOY.

Whilst it's possible that on an absolute return basis, CIP and COF will be a superior investment out to 2026, I think C2FHA represents good value on a risk adjusted basis.