CIP derrimut VIC
CIP’s new asset in Derimut. Image supplied.
  • The three acquired assets have a collective estiamted end value of $59 million
  • A Victorian asset has been divested, sold at a 37% premium to book value
  • CIP seeks to deliver high-quality assets in supply constrained markets

Centuria Industrial REIT (ASX: CIP) is continuing to expand its portfolio announcing the acquisition of two developments and a strategic investment property.

The three assets provide a collective estimated end value of $59 million. Centuria has also announced the fund has divested an asset for $34.5 million, at a 37% premium to book value.

The news follows CIP’s strategy to deliver high-quality assets in supply constrained markets with low vacancy rates. The disinvestment provides an opportunity to deploy proceeds into value-add development initiatives.

“Divesting of a non-descript asset presents an opportunity to recycle capital into higher-yielding strategic acquisitions and developments,” said Jesse Curtis, CIP Fund Manager and Centuria Head of Industrial.

“The strong premium to book value reinforces CIP’s Net Tangible Asset (NTA) backing and is demonstrative of CIP’s ability to deliver value to unitholders.

jesse curtis centuria
Jesse Curtin. Image supplied.

“The acquisitions build on CIP’s high quality industrial portfolio within urban infill, land constrained markets with access to densely populated catchments.

“We continue to position the portfolio towards capturing rising tenant demand while benefitting from rental growth in highly sought industrial markets.”

Jesse Curtis, Centuria

The sites, acquisitions and divestment

Firstly, a 2.5-hectare brownfield site at 204-208 Bannister Road, Canning Vale WA, was acquired for $10.1 million. On completion, the asset is estimated to be valued at $31.1 million, providing a 5.25% yield on cost.

The development will deliver around 12,300 sqm of modern sustainable industrial product Completion is expected by Q4 FY23.

Secondly, a 1.25-hectare site at Lot 16 Caribou Drive, Direk SA, was acquired, which adjoins CIP’s existing property, consolidating a 3-hectare landholding in the region.

The land was acquired for $2.3 million, with an estimated value at the competition of $16 million, a 6% yield on cost. Cip will construct a stand-alone 6,900 sqm industrial facility, or extend the adjoining warehouse.

The asset at 95 Fulton Drive, Derrimut VIC, was acquired for $12 million, reflecting a capitalisation rate of 4.25%. The 5,331 sqm property is presently 100% occupied, with a short 0.7-year WALE.

The acquisition adds to CIP’s site consolidation in the area, which now totals nine assets across 25.3 hectares, worth $241 million.

The divestment was a 6,020 sqm non-descript asset at 30 Clay Place, Eastern Creek NSW, valued at $34.5 million.

This represented a 37% premium to the previous book value of $25.2 million. Currently, the property is 48% office space and has a site coverage of 55%.

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