This article is from the Australian Property Journal archive
CENTURIA Capital spent $18 million securing a second asset for a wholesale unlisted fund, with the acquisition of a warehouse facility in Sydney’s core central western infill industrial market of Wetherill Park.
Located at 26 Redfern Street – 27 kilometres west of the Sydney CBD and eight kilometres south-west of the Parramatta CBD – the asset is composed of two freestanding industrial units totalling 4,530 sqm with a 46% site coverage.
Centuria is eyeing off the value-add opportunity to capitalise on its remaining lease term in the tightly held western Sydney market where vacancy has reached a low 0.9%.
“Centuria Select Opportunities Fund (CSOF) is designed to execute on a counter-cyclical strategy, capitalising on market opportunities to extract outsized returns for investors,” said Jesse Curtis, Centuria head of funds management.
“This Wetherill Park property provides an opportunity to lean on Centuria’s strong in-house asset management capabilities to achieve compelling re-leasing spreads and rental income in line with the wider infill central western Sydney industrial market.”
CSOF has raised $50 million of equity from its Australian wholesale investor network and aims to deploy its capital across the coming 15-month period, targeting a 15% internal rate of return across a five-year term. Centuria is co-investing alongside its wholesale investors.
The fund will aim to generate returns by improving the functionality of the warehouses and undertake strategic leasing to access stronger rental streams from the asset. Both industrial units are circa 2,265 sqm with 150 sqm office spaces and benefit from multiple on-grade roller doors and one sunken loading dock, high clearances, and substantial power capacity.
Warehouse 1 includes a 3.2-tonne gantry crane and Warehouse 2 benefits from a surplus hardstand area for external storage. The warehouses are currently leased to different tenants.
The asset provides access to 1.4 million households within a 60-minute drive, positioned in proximity to M7 Motorway, M4 Motorway, the Cumberland Highway and The Horsley Drive.
The fund’s seed asset was acquired last month – a $20.6 million industrial logistics facility in south-east Melbourne’s industrial heartland of Keysborough.
Across Centuria’s listed and unlisted funds, it manages 27 industrial properties worth around $1.3 billion within western Sydney and, compared to this 410,000 sqm portfolio, Centuria believes the current Redfern Street warehouses are significantly under-rented.
The property was sold via Cushman & Wakefield’s Carl Pearce, Nick Brooks and Alistar Siokos.
