- Morgan Stanley vehicle acquired approx. 50% interest in eight CIP owned assets
- Acquired for $180.9 million
- Partnership known as Centuria Prime Logistics Partnership
The deal will see an investment vehicle sponsored by Morgan Stanley Real Estate Investing (MSREI) acquire a circa 50% interest in eight Centuria Industrial REIT (ASX: CIP) owned prime-grade industrial assets for $180.9 million.
The industrial real estate partnership will be known as the Centuria Prime Logistics Partnership and include Centuria properties from across the eastern seaboard:
8 Lexington Drive in New South Wales‘ Bella Vista saw a new ten-year lease signed for the property in December last year and was acquired by Centuria in May 2021. The distribution centre had a book value of $38 million, according to CIP’s FY22 Results.
Two other facilities in New South Wales included 29 Glendenning Road in Glendenning and 52-74 Quarry Road in Erskine Park. The former had a book value of $71.7 million, and Quarry Road had a book value of $31 million, according to CIP’s FY22 results.
Centuria Industrial REIT’s 95-105 South Gippsland Highway property in Dandenong South, Victoria was acquired in 2021 for $26.3 million. The company then said that following the land acquisition it will “construct a six-asset industrial estate, requiring $62.5m investment, which will deliver an asset with an estimated end value of $88.8m.”
Among the other Victorian properties: 40 Scanlon Drive in Epping and 69 Studley Court in Derrimut. The properties had book values of $17.5 million and $40 million, according to the FY22 report.
The final two properties out of eight are in Queensland: 42 Hoepner Road and 1 Ashburn Road both in Bundamba, with book values of $24.3 million and $59.2 million respectively.
CIP said the transaction reflects a divestment yield of 4.7% and enables CIP to bolster its balance sheet by reducing debt and gearing while retaining exposure to these high-quality strategic assets.
“The formation of this partnership demonstrates the resilience of CIP’s portfolio and the continued demand for high quality industrial assets within urban infill markets in which CIP operates. Establishment of this partnership, along with other recently completed divestments, demonstrates CIP’s ongoing commitment to prudent capital management and portfolio optimisation,” said CIP fund manager and Centuria Head of Industrial, Jesse Curtis.
“This new partnership expands our existing relationship with MSREI, having established the pure-play healthcare real estate vehicle, Centuria Prime Partnership, in May 2022. Our access to diverse property sectors continues to present opportunities for us to increase the institutional capital that is seeking to partner with Centuria,” added Centuria Joint CEO Jason Huljich.
CBRE acted on behalf of CIP for this transaction.
