Transcription of The Stock Network Interview with Centuria Capital (ASX:CNI), Co-Head of Unlisted Funds Stuart Wilton
Lel Smits: Centuria Capital Group manages $22.2 billion of assets and its unlisted property funds raise capital from a network of more than 15,000 private investors. The group has just launched its largest single asset fund to date, seeded with a Sydney CBD Prime office asset. Ahead of presenting at TIPS Conference, I’m joined by Centuria’s Co-Head of Unlisted Funds, Stuart Wilton, to discuss what private investors want from property and the outlook for unlisted funds.
Stuart, welcome to The Stock Network.
Stuart Wilton: Thanks very much, Lel. I appreciate you having me.
Lel Smits: Now, Centuria’s unlisted funds range from a Sydney CBD office building to Australia’s largest hydroponic glasshouse. How do you decide which assets suit private investors?
Stuart Wilton: Yeah, it’s a good question. Look, we have recently more been interested in the larger scale, what we would call institutional grade assets, because they tend to be high quality, better located, the tenants that produce the cash flow are more high quality as well.
So we’ve generally been focusing on those types of properties across all sectors, but also the ones that provide a decent yield and an income return, particularly given in the environment we’re at at the moment. So we like to have a nice spread between where the bond yields are at, and also where term deposits are. So that becomes far more attractive for those private investors.
Lel Smits: Fantastic. And in terms of the outlook ahead, many investors have been cautious on office since the pandemic. What’s given Centuria the confidence to back Sydney CBD offices now? And also, which sectors do you think come next for the unlisted platform?
Stuart Wilton: Yeah, so on office, I understand why a few people or some investors might be a little hesitant towards that sector.
But what we’re seeing at the moment is quite a big turnaround in that market. That’s been driven by, in Sydney anyway, some of the largest or the best net absorption that markets experienced over the past 10 years. So in 2024 and 2025, there was 85,000 square metres of net absorption each year, which is the largest the markets had in a decade.
So what that means is the demand has been the best it’s been in 10 years. And then you also overlay that with the fact that construction costs are extremely expensive. So the rents that you need to command in order to make a feasibility stack are extremely high.
So the supply pipeline is significantly constrained. But also, you overlay that with the fact that there’s also around about 300,000 square metres of withdrawals of office space coming out of the market. So permanently removed from the market.
So the combination of the demand picking up, limited supply and also stock coming out of the market has made it, from our point of view, a really good time to invest, particularly when it’s at a counter-cyclical time now, where you can buy at some attractive entry prices as well. So the combination of those things made it really attractive for us to invest in the Sydney CBD now. But in terms of other sectors as well, we’re sector agnostic.
We invest across a number of areas, including industrial, office, daily needs, retail, large format retail, agriculture, healthcare, private credit as well. So we’re more opportunistic in terms of we’re deal-driven as opposed to being constrained by market or sector. So we do look for those types of assets that do have a strong income yield, strong tenant base, well-located, high-quality improvements, but also in markets that have some significant infrastructure that’s planned, but also coming back to that supply-constrained market.
That’s a big thing for us because we just see the population growing in Australia quite rapidly, even with the new changes or potential changes to immigration over the short to medium term, the population is still growing at quite a healthy rate. And when you can’t build anything and there’s being stock taken out of the market, we think it’s a very good combination to invest in commercial real estate.
Lel Smits: Well, Stuart, I appreciate the update from Centuria. I look forward to hearing more when you’re on stage at TIPS conference.
Stuart Wilton: No worries. Thanks, I’ll appreciate it.
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