This article is from the Australian Property Journal archive
THE Centuria Industrial REIT’s investment strategy has paid off, after offloading a non-core regional asset in Hume in nation’s capital for $28.1 million at a 21% premium to its book value.
Located at 54 Sawmill Circuit, the 8,689sqm modern industrial facility was acquired by CIP in January 2017 and provided a 16% IRR throughout the group’s ownership.
“The Hume divestment is demonstrative of CIP’s strong track record for divesting assets at or above book values,” said Grant Nichols, fund manager at CIP.
With contracts exchanged, upon settlement the sale will represent a 21% premium to its December 2023 book value of $23.3 million. With sale proceeds to initially be used to repay debt.
“Throughout FY24, the REIT has divested c.$120million of non-core industrial facilities at an average premium to book value of 4%. The strategic divestments improve the quality of CIP’s portfolio construction while realising the benefits of value-add strategies for our unitholders,” added Nichols.
“The Hume transaction also illustrates the REIT’s portfolio liquidity and underpins its Net Tangible Asset (NTA) backing.”
As at December 2023, the asset had a capitalisation rate of 5.75%, with a WALE of 3.5-years and 100% occupancy to Grace Group.
The 2010-completed warehouse and document storage facility spans 1.8-hectares, with the facility representing 48% site coverage.
The transaction follows CIP spending $39 million on a Perth data centre asset at the start of the month, with the REIT backing the booming sector by expanding its data centre sub-portfolio to two assets worth $456 million and representing about 12% of its total portfolio.
Having purchased a Telstra data centre complex in south-east Melbourne in a $416.7 million sale and leaseback deal four years ago.
Settlement for the sale of 54 Sawmill Circuit, Hume ACT is anticipated for Q1 FY25.
Industrial and logistics transaction volumes saw a marked return in the June quarter, with Colliers’ recent Industrial Q2 Snapshot revealed there were $2.1 billion worth of assets traded in the second quarter, taking the total volume of the first half of the year to $2.7 billion across 67 assets.
