This article is from the Australian Property Journal archive
CENTURIA Industrial REIT has picked up three cold storage industrial facilities on the east coast for a combined $171.1 million and launched a $125 million equity raising to partially fund the acquisition.
The initial yield of the fully leased portfolio comes in at 5.62%, with a weighted average lease expiry of 6.4 years.
In Sydney, a 25,418 sqm facility in Girraween was acquired for $73.1 million in a sale and leaseback deal with Bidfood. Located at 67-69 Mandoon Rd, it will have a seven-year triple-net lease to the wholesale food distributor.
Both cold storage facilities at 45 Fulton Dr, in Melbourne’s Derrimut and 60-80 Southlink St, in the outer southern Brisbane suburb of Parkinson, were secured for $49 million each, from German group DWS.
The assets total 20,000 sqm, are leased to leading national refrigerated transport and distribution provider, Rand Transport. Derrimut has a 5.8-year WALE, and Parkinson a 6.1-year WALE.
45 Fulton Dr Derrimut
“Throughout the 2020 calendar year, there has been a considerable consumer shift towards non-discretionary online retailing due to the impact of COVID-19,” Ross Lees, Centuria head of funds management, said.
“Adding to this is the unmet demand for cold storage facilities from the grocery and pharmaceutical sectors. These metrics have underpinned Centuria’s rapid portfolio expansion within the industrial and logistics sector.
“It has been a resilient sector and one we believe will continue growing in the near future.”
Centuria’s funds have acquired about $1.1 billion in industrial assets over the past 12 months, including the record-setting $417 million purchase of a Telstra data centre in Melbourne’s south east, the Arnott’s portfolio for $236 million at the end of 2019, and a Visy Glass manufacturing facility in New Zealand last month.
Spurred by e-commerce and logistics trends accelerated by the COVID-19 pandemic, industrial asset transaction volumes have outpaced office deals for the first time in almost 10 years.
CIP’s acquisitions are expected to settle by early December, which will take CIP’s market capitalisation increase to $1.7 billion. Its portfolio will grow to 59 assets worth $2.3 billion following the deal, with occupancy of 96.8% and a 9.7-year WALE. The trust also upgraded its full year funds from operations guidance to be no less than 17.5 cents per unit, and reaffirmed full year distribution of 17.0 cpu.
67-69 Mandoon Rd Girraween
“The east coast, cold storage portfolio acquisition leverages a key growth thematic for CIP in the non-discretionary, food and pharmaceutical distribution and refrigerated logistics industries,” CIP fund manager, Jesse Curtis said.
“The three assets are strategically located in core industrial markets of Sydney, Melbourne and Brisbane, with excellent connectivity to distribution networks. They provide secure income streams supported by leading national and international operators.”
The fully underwritten institutional placement to raise approximately $125 million was issued at $3.06, representing a 2.9% discount to last close, 3.3% discount to the 5 day VWAP of $3.17 per unit, and 5.7% FY21 FFO yield and 5.6% FY21 distribution yield.
The placement is fully underwritten by J.P. Morgan and Moelis.
CIP will draw down $58.7 million from its existing debt facility to cover the balance.
