In August 2026, Centuria Industrial REIT reported its FY26 results. Across 226,200 square metres of leasing, new rents were on average 30 per cent higher than the leases they replaced. The REIT says its leases still sit 17 per cent below market.
That gap between passing rent and market rent is called reversion. Large landlords plan for it. Private investors can buy it.
A Brisbane example
We bought 2,300 square metres of older warehouse buildings in Brisbane for our client. The rents were well below market. Within four months of settlement we had signed six new leases. Net income rose from $160,000 to $355,000 a year. The revaluation added about $2.05M in capital value.
No change of use and no development. The uplift came from leasing the space at market rent.
How to spot an under-rented asset
Compare passing rent per square metre to recent leasing in the same suburb and size range.
Look for leases signed four or more years ago with fixed 3 per cent reviews. Market rents grew faster.
Check the lease expiry dates. Reversion is only worth something once you can capture it.
Look for gross leases a new lease can move to net.
Look for vacant or month to month space priced as a risk.
The risks
A tenant leaves at expiry and the space sits empty.
Market rent turns out lower than the agent's figure.
The building needs capital works before a new tenant signs.
Price these into the offer. Underwrite the purchase on current income, and treat the reversion as upside.
What to do next
Ask the selling agent for the tenancy schedule with rent per square metre and expiry dates.
Check three recent leasing deals nearby of a similar size.
Model income at expiry, with a vacancy allowance and leasing costs.
This is the core of our commercial asset management work.
General information only. Not financial advice.