centuria-building-aerial-view-feature
Image – Supplied.
  • Four properties across Australia were acquired
  • Four other properties were settled
  • Equity raising will partially fund the acquisitions

Centuria Industrial REIT (ASX: CIP) today announced the company has entered into agreements to acquire four urban infill industrial freehold assets and completed the acquisition of four other freehold assets for a total purchase price of $351.3 million.

CIP said the acquisition has an average initial yield and a weighted average capitalisation rate of 4.23%.

The company said the acquisitions will be partly funded by a fully underwritten institutional placement that is expected to raise circa $300 million, and a non-underwritten unit purchase plan to raise approximately $25 million.

Centuria also noted that the equity raising will provide capacity to debt fund its pipeline of acquisitions in due diligence.

Prices for the new units are yet to be determined and are subject to an underwritten floor price of $3.80 per unit. The underwritten floor price represents a 5.2% discount to the CIP closing price of $4.01 per unit on 22 September 2021.

CIP reaffirms FY22 guidance with funds from operations of no less than 18.1 cents per unit, reflecting a 4.8% yield on the floor price, and distribution of 17.3 cpu, reflecting a 4.6% yield on the floor price.

The properties

Centuria’s acquisitions are spread across the country, with most along the east coast, and one in Western Australia.

Properties Sub-sector State Title Purchase Price Initial yield Cap rate WALE (years)  Occupancy
56-88 Lisbon Street, Fairfield Distribution centre NSW Freehold  $200.2 million 3.60% 3.88% 4.1 100%
164-166 Newton Road, Wetherill Park Distribution centre NSW Freehold  $36.8 million (settled) 4.00% 4.00% 3.5 100%
51-65 Wharf Road, Port Melbourne Distribution centre VIC Freehold  $22.0 million 3.70% 4.00% 1.8 100%
31 Gravel Pit Road, Darra Distribution centre QLD Freehold  $19.0 million 5% 4.75% 4.4 100%
48-54 Kewdale Road, Welshpool Distribution centre WA Freehold $35.1 million 6.30% 5.60% 2.9 100%
346 Boundary Road, Derrimut Transport logistics VIC Freehold  $11.9 million (settled) 5.50% 5.25% 3 100%
31-35 Hallam South Road, Hallam Transport logistics VIC Freehold  $6.2 million (settled) 5.80% 5.75% 3 100%
51 Depot Street, Banyo Cold storage QLD Freehold  $20.3 million (settled) 4.70% 4.38% 7.4 100%

“We consider the acquisitions to be under rented as market rents have continued to grow at a rapid rate on the back of accelerating tenant demand, driven by e-commerce and last-mile users,” said CIP Fund Manager, Jesse Curtis.

“The WALE of 3.8 years provides the opportunity to leverage CIP’s strong leasing capability to achieve positive rental reversion capturing outsized rental growth being experienced within infill industrial markets.”

“In addition, a number of the sites have value add potential through leasing, development or reportioning, adding to CIP’s value-add pipeline.”

Following the transaction, CIP’s portfolio will increase to 75 high-quality industrial properties worth $3.5 billion (98.4% freehold).

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