This article is from the Australian Property Journal archive
THE Centuria Industria REIT (CIP) has snapped up a $129.4 million portfolio of four strategic urban infill assets, in New South Wales, Victoria and Queensland.
The freehold industrial assets span 46,526sqm and are 100% weighted to eastern seaboard markets, with 84% weighted to NSW and VIC.
“The acquisitions lend themselves to last-mile transport logistics and distribution tenant customers and benefit from strong tailwinds across Australia’s industrial sector, particularly from the strong rise in eCommerce adoption and supply chain onshoring,” said Jesse Curtis, fund manager at CIP and head of industrial at Centuria.
The combined portfolio has a WALE of 3.5 years, with 98% occupancy and a purchase price representing a 4.0% initial yield, with a 4.22% capitalisation rate.
“These assets align with CIP’s strategy to acquire properties located in land constrained urban infill markets, where tenant demand currently outstrips forecast supply,” said Curtis.
The acquisitions include the 22,439sqm 82 Rodeo Road in Gregory Hills, purchased for $70 million on an initial yield of 3.7% and a cap rate of 3.88%.
The super prime-grade transport logistics facility in Sydney’s south west growth corridor, with ample connectivity to major arterials roads. The property has a WALE of 4.2 years and is 100% leased to GMK Logistics, though it is considered under rented.
The distribution centre at 30 Fulton Drive in Derrimut, VIC was purchased for $20.6 million at an initial yield of 4.9% for a cap rate of 4.50%.
The Derrimut property spans 10,733sqm and is 100% leased to Signoide Australia Pty Ltd, with a WALE of 2.0-years and room for value add opportunities through expansion on surplus under-utilised land.
Also in Victoria, the office and warehousing facility at 870 Lorimer Street in Port Melbourne’s infill market was acquired for $18.0 million at an initial yield of 2.1% with a 4.00% cap rate.
The 2,392 facility is 100% leased and will provide CIP with access to Port Melbourne’s growing and already large population catchment, while its location and zoning will also provide value add opportunities.
Finally, in Queensland a 10,962sqm industrial urban infill site at 55 Musgrave Road, Copper Plains was purchased by CIP for $20.8 million, at an initial yield of 4.1% and a cap rate of 5.25%.
The property in Brisbane’s south currently has four tenancies for a 3.4 year WALE and is 89% occupied, providing CIP with room for value add via leasing current vacancies.
“The portfolio of assets provides a number of opportunities to actively manage the portfolio to add-value through capturing outsized rental growth from under-renting of the assets and potential development or activating higher and better use potential,” concluded Curtis.
CIP will fund the portfolio acquisition by new and existing debt facilities.
The purchases follow the REIT’s offloading of a 3.25-hectare warehouse site for $10.5 million in southern Perth, as well as Centuria announcing its industrial portfolio across Australia and New Zealand’s value is now in excess of $5.1 billion, or 30% of its total group platform.
