Centuria Office/COF

COF is a big office landlord, like Dexus.

And, in their results commentary, they describe a reasonably bullish outlook, in that the “leasing distress predicted by market speculators has not eventuated”. The key is that work from home (WFH) has seemingly “found an equilibrium”.

Dexus have described a similar enough outlook, predicted on prime/premium grade assets doing well, with a reasonable degree of leasing activity, and occupancy holding up broadly well in the low-to-mid 90s.

The difference for us is that DXS has much lower gearing, COF sits closer to 40%. Most of the funds from operations were (at the margin, between the results) eaten up by the increased gearing costs.

COF’s yield is enormous, and DXS’s is much less (~6% and change, for DXS, closer to c9% for COF), but for us, with a similar enough narrative to the story, we’ll go with the lower gearing.

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