- Six urban sites have been acquired by Centuria for their industrial portfolio
- Includes over 41,000sqm in gross lettable area
- Campbellfield site will be redeveloped to become a $104M multi-unit industrial facility
Centuria Industrial REIT (ASX: CIP) has announced its first acquisition of 2022; six urban infill industrial assets across Victoria, New South Wales and Queensland.
The assets, with an end value of $132.4 million, were targeted given the strong-performing eastern seaboard markets as part of Centuria’s strategy of capitalising on land constrained, urban infill markets.
Presently, assets in these areas are in high demand from e-commerce operators who wish to improve the efficiency of supply chains in densely populated areas.
The portfolio has an initial yield of 4% with a capitalisation rate of 4.21% with a weighted average lease expiry of 4.7% years. Occupancy is 100%.
|Properties||State||Value||Initial Yield||Capitalisation Rate||GLA||WALE||Occupancy|
|90-118 Bolinda Road Campbellfield||VIC||$37.7M||4.5%||4.5%||8,210sqm||0.7||100%|
|159-169 Studley Court, Derrimut||VIC||$17.1M||4.3%||4.25%||7,725sqm||4.8||100%|
|43-49 Wharf Road, Port Melbourne||VIC||$11.5M||3%||4.25%||2,387sqm||1.7||100%|
|8 Hexham Place, Wetherill Park||NSW||$12.2M||3.6%||3.63%||3,217sqm||1.7||100%|
|590 Heatherton Road, Clayton South||VIC||$27.5M||4%||4%||9,575sqm||10||100%|
|5/243 Bradman Street, Acacia Ridge||QLD||$26.5M||3.9%||4.25%||9.897sqm||7.8||100%|
The most notable acquisition is an eight-hectare site in Campbellfield. Upon the expiry of a short-term lease in place, a brand new five-unit 44,000sqm industrial site will be built – bigger than the six assets combined.
Upon completion, the asset will have an estimated on-completion value of $104.1 million. The development will be conducted in partnership with Cadence Property Group, who are presently working with Centuria on the $89 million Southside Industrial Estate in Dandenong.
Fund manager and Centuria’s head of industrial, Jesse Curtis, said the site provides a rare, value-add opportunity to deliver a new and sustainable multi-unit industrial estate.
“With tenancies ranging from 3,200sqm to 20,000sqm, it caters to the most active leasing size range in the market,” he said.
“The north Melbourne industrial market has vacancy of less than 2% and is attracting strong interest from high-quality tenant customers. This backdrop gives us confidence to deliver state of the art, sustainable industrial facilities.”
Jesse Curtis, Centuria
Charlie Buxton of Cadence Property Group added they are excited to be partnering with Centuria once again.
”Our experience to date, in other infill markets, is that there is a real lack of modern logistics accommodation and that the product is well sought after by tenants wanting to remain in infill locations. We expect this development to target a similar demand profile.”
Charlie Buxton, Cadence Property Group
Construction is expected to commence in 2023, with practical completion set for 2024.
Eyes set on last-mile, e-commerce tenants
Mr Curtis added all six sites place for a favourable leasing outlook for rental growth and are underpinned by near zero vacancy.
“These conditions provide opportunities to extract outsized returns from the assets,” he said.
“These six acquisitions mark a strong start to 2022 and continue to demonstrate CIP’s management capability to source and execute on strategy acquisitions.
“The acquisitions adjoining existing CIP-owned assets create future development sites of scale in desirable and land constrained urban infill markets.”
The assets increase the industrial portfolio to around $4 billion, and will be funded by both new and existing debt facilities.
CBRE’s Jason Edge and Rory Hilton facilitated the Campbellfield transaction with Collier’s Jack Kelliher the agent for the Port Melbourne transaction.