Centuria sells $103m Sydney office providing significant capital growth

• Biomed Building, South Eveleigh originally acquired for $40m; 150%+ capital value increase; sold at book value
• Part of unlisted ATP Fund’s original $104m three-asset portfolio, now two divestments total over $121m¹
• Fund provides avg 15% p.a. distribution yield², 22% forecast Fund IRR³
• Demonstrates investment appetite for metropolitan office assets of c.$100m

Australasian real estate fund manager, Centuria Capital Group (ASX:CNI or “Centuria”), has divested an office asset known as the Biomed Building at 1 Central Avenue, South Eveleigh NSW for $103 million to a local private investor.

This acquisition reinforces the demand for Sydney fringe office assets of c.$100 million.

The asset was originally acquired in April 2016 for $40 million as part of a three-asset portfolio for the unlisted Centuria ATP Fund. Centuria acquired the portfolio for a collective $104 million and has since divested two assets for a collective $121.25 million¹, with one further asset still owned by the Fund.

1 Central Avenue’s sale reflects a 150% capital appreciation throughout Centuria’s eight-year ownership period. The asset was sold at book value.

Jesse Curtis, Centuria Head of Funds Management, said, “We acquired three South Eveleigh office buildings for the ATP Fund on the cusp of the area’s regeneration. As one of the first institutions to support the precinct, our investors have since benefitted from significant social and commercial infrastructure in the area. Its fringe market location has developed into a thriving hub for large and medium-sized businesses, providing easy commutability and lifestyle amenities.”

1 Central Avenue provides a 97.1% occupancy⁴ and 6.6-year Weighted Average Lease Expiry (WALE)⁵. The building’s anchor tenant is The University of Sydney. The office building was constructed in 1998 and provides a 7,716sqm net lettable area (NLA).

In February 2020, Centuria ATP Fund investors received an early capital return of $0.47 per unit. In May 2023, Centuria divested the Fund’s first asset, “The Belltower”, for $18.25 million, providing a +450% increase to its original acquisition value of $3.3 million.

With the sale of 1 Central Avenue, the Centuria ATP Fund’s remaining asset is the Data61/CSIRO Building at 13 Garden Street, Eveleigh NSW. If this asset is sold at or above its current book value⁶, investors are forecast to receive a total return exceeding 300%⁷ and an IRR of 22%³ since the Fund’s inception.

To date, fund investors have benefited from an average distribution yield of 15% per annum².

1 Central Avenue is expected to settle in August 2024.

The off-market sales process was negotiated by Rebus Property’s Scott Timbrell. The purchaser was advised by Kurraba Group.

1.  Divestment of The Bell Tower in May 2023 and 1 Central Avenue, which is anticipated to settle in August 2024.
2.  Average distribution yield per annum on the remaining equity based on the original issue price of $1.00 per unit since the fund’s inception.
3.  Forecast IRR as at 30 June 2024, post fees and pre-tax.
4.  Occupancy by NLA as at 1 May 2024.
5.  WALE by gross income as at 1 May 2024.
6.  Based on 31 December 2023 book value.
7.  Based on sales and remaining asset’s book value as at 31 December 2023, throughout the eight-year duration since the Fund’s inception.