This article is from the Australian Property Journal archive
CENTURIA Industrial REIT has gone shopping, spending $351.3 million on eight urban infill industrial freehold assets across NSW, VIC, QLD and WA.
The acquisitions included entering into agreements for four industrial assets and completing deals for an additional four freehold assets.
The purchases reflected an average initial yield of 4.1% and an average capitalisation rate of 4.23%, with each asset at 100% occupancy for a combined GLA of 119,078sqm.
“These acquisitions are aligned with CIP’s portfolio strategy to acquire high-quality assets in urban infill locations where accelerating tenant demand is driven by ecommerce and last-mile users,” said Jesse Curtis, head of industrial at Centuria and fund manager of CIP.
CIP undertook a fully underwritten institutional placement to raise approximately $300 million and an underwritten unit purchase plan to raise approximately $25 million to partially fund the acquisitions and add capacity to debt fund its pipeline of acquisitions in due diligence.
The major acquisition was a $200.2 million super prime distribution centre, at 56-58 Lisbon Street in Fairfield, NSW, has a 60,223sqm GLA, a WALE of 4.1 years and a sale price reflecting an initial yield of 4.1 years.
The facility is one of the Sydney infill market’s largest industrial facilities and one of only 10 large scale distribution centres within the M2, M7 and M5 orbital road network.
The remaining $151.1 million of assets acquired sit within key urban infill markets across the country and are not just geographically diversified additions to CIP’s portfolio but are diversified across the distribution centre, cold storage and transport logistics segments.
“The transactions further demonstrate our capability of sourcing off-market opportunities and curating a high-quality portfolio of industrial and logistics assets that have favourable pricing and superior quality to recent portfolio transactions in the market,” added Curtis.
The other distribution centres acquired included 164-166 Newton Road in Wetherill Park, NSW, purchased for $36.8 million for a 4.0% initial yield, with 11,883sqm of GLA and a WALE of 3.5 years.
51-65 Wharf Road in Port Melbourne, Victoria, purchased for $22.0 million for an initial yield of 3.7%, with 4,410sqm of GLA and a WALE of 1.8 years.
31 Gravel Pit Road in Darra, Queensland, purchased for $19.0 million for an initial yield of 5.0%, with 9,089sqm of GLA and a WALE of 4.4 years.
48-54 Kewdale Road in Welshpool, WA, purchased for $35.1 million for an initial yield of 6.3%, with 20,349sqm of GLA and a WALE of 2.9 years.
While the transport logistics facilities included 346 Boundary Road in Derrimut, Victoria, purchased for $11.9 million for an initial yield of 5.5%, with 4,215sqm of GLA and a WALE of 3.0 years.
31-35 Hallam South Road in Hallam, Victoria, purchased for $6.2 million for an initial yield of 5.8%, with 4,810sqm of GLA and a WALE of 3.0 years.
Finally the cold storage facility is located at 51 Depot Street in Banyo, Queensland, purchased for $20.3 million for an initial yield of 4.7%, with 4,099sqm od GLA and a WALE of 7.4 years.
“We consider these assets to be under rented with low vacancy and limited new supply continuing to put upward pressure on rents in infill location. The blended 3.8-year WALE provides an opportunity to leverage Centuria’s strong in-house leasing capability to achieve positive rental reversion capturing outsized forecast rental growth,” added Curtis.
“In addition, a number of the sites have surplus land, low site coverage and overlapping lease expiries, providing further value add potential through development, redevelopment or repositioning.”
These acquisitions bring CIP’s portfolio up to 75 properties with a combined value of $3.5 billion, while the REIT has pipeline of $100 million acquisitions in due diligence.
Within the last week, the group also nearly doubled the value of its Centuria Healthcare Property Fund to $342 million., acquiring a $167 million portfolio.
CIP also reaffirmed its FFO guidance of at least 18.1cpu, reflecting a 4.8% yield and a distribution guidance of 17.3cpu, reflecting a 4.6% yield.
