This article is from the Australian Property Journal archive
CENTENNIAL has secured a 5.6-hectare industrial and logistics site anchored by Harvey Norman and Barwon Motors in Brisbane’s bayside suburb of Cleveland for $31.2 million after an oversubscribed capital raising.
The site will site in the national fund manager and developer’s single-asset Cleveland Industrial Park Trust, which closed oversubscribed in late August to the tune of around $20 million with wholesale and high net worth investors drawn to targeted internal rate of return (IRR) of 14% to 15% per annum.
Located between Brisbane and the Gold Coast, the site at 19 Enterprise Street has 19,485 sqm of gross lettable area (GLA) and is 78% leased to whitegoods and electronics giant Harvey Norman and car dealers Barton Motors.
The property offered strong rental reversion given its short weighted average lease expiry (WALE) of 3.1 years and a high underlying land value. Centennial acquired the asset at a 55% discount to replacement cost with an underlying land value of 81%.
It was bought from a private vendor in a sale jointly brokered by Colliers’ Simon Beirne, James Wilkie and Angus Yale, together with CG Property’s Michael Callow and Jonathan Burrowes.
Centennial’s head of portfolio management, Nick Lidonnici said Cleveland Industrial Park is under-rented by more than 20%.
“This acquisition presents strong return profiles and through an active asset management strategy targeting rental growth based on current and future market forecasts, together with upcoming rental expiries and market demand, we are very confident to be adding Cleveland Industrial Park to our growing asset base that’s now approaching $2.4 billion owned or under management.”
He said Centennial was also drawn to the estate based on its low site coverage sitting at 39%.
“The site lends itself to multiple value-add opportunities, including the potential to increase GLA by up to 3,600 sqm through warehouse expansion.”
Centennial is confident new supply of industrial and logistics facilities in the area is trailing tenant demand and Lidonnici said Cleveland Industrial Park would appeal to a broad range of occupiers, including logistics and distribution operators, light manufacturing, food processing and even medical supply companies given the latter sector is within one kilometre of the Redland and Mater hospitals.
“The property’s proximity to both Brisbane and the Gold Coast and connectivity to the major transport routes of the Gateway and M1 motorways, plus its location in the heart of one of South East Queensland’s fastest growing population centres, makes this acquisition a highly attractive investment with solid capitalisation fundamentals.”
Callow said the site’s location within a tightly held industrial corridor in the growing Redlands LGA, coupled with the site’s short WALE period exhibits all the right indicators in delivering positive rental uplift through value-added opportunities.”
Centennial recently finalised the purchase of a large industrial site south west of Brisbane at Tivoli for $35.5 million and has a further two acquisitions in the pipeline, with the trio valued at approximately $100 million.
Centennial and Parkstone Funds Management acquired Bundaberg’s largest shopping centre for $107 million from the Queensland government’s investment arm QIC earlier this year, with the deal settling in late March. It has secured an equity stake in Parkstone as part of their joint acquisition
