22 July 2019
$127 million acquisition of 80 Flinders Street, Adelaide
Centuria Capital Group (Centuria) is pleased to announce:
- Unconditional exchange to acquire 100% interest in 80 Flinders Street, Adelaide,
launch of new unlisted fund
- Strong commencement to FY20 with $127 million acquisition – expands upon more
than $0.9 billion of Group transactions in FY19
- Attractive commencing fund FY20 distribution yield of 6.50% p.a.1,2
- Fully leased prime building, 95% of gross income underpinned by multinational and ASX listed companies
- Adelaide is well positioned to benefit from approximately $130 billion of infrastructure and defence projects.
Centuria subsidiary, Centuria Property Funds Limited, has exchanged unconditional contracts to acquire Adelaide’s 80 Flinders Street office building for $127 million, generating a new fund for Centuria’s unlisted division. The fund is expected to launch in August 2019, delivering FY20 and FY21 distribution yields of 6.50% p.a1,2 and 6.60% p.a.2.
Constructed in 2006 and refurbished in 2019, 80 Flinders Street is an A-Grade building located in Adelaide’s core CBD precinct. The asset has a WALE3 of over 4.0 years and is 100% occupied3 with 95% of gross income underpinned by multinational and ASX listed companies.
Jason Huljich, Joint CEO, said “The group’s latest acquisition represents another example of our team’s ability to selectively identify quality real estate opportunities in a highly competitive environment. As a market, Adelaide is continuing to transform, offering attractive fundamentals relative to other core CBD markets. The tenants within 80 Flinders Street are also well positioned for growth, with South Australia’s strong commitment to a pipeline of approximately $130 billion of infrastructure and defence projects.
“We are excited to be launching a new unlisted fund in Adelaide, a market that we have strong operational expertise within. Across the Group we are managing over $200 million of A-grade assets from both our listed and unlisted divisions located in this region and we continue to identify quality opportunities within this market to provide to our broad investor base.
“Quality real estate opportunities continue to provide attractive alternatives to other asset classes in the current environment. We continue to see examples of attractive spreads between real estate returns being generated and other investment options such as cash rates, term deposits and government bonds.4
“Centuria’s property team expects to build on FY19 momentum with a greater range of attractive real estate acquisitions in FY20 across its stable of listed, unlisted and healthcare funds.”
The sale was managed by Guy Bennett of Knight Frank and Ian Thomas of CBRE.
1. Annualised forecast yield for the period 1 October 2019 to 30 June 2020.
2. Forecast returns are predictive in nature and are calculated in accordance with a number of underlying assumptions set out in the Product Disclosure Statement. As such, returns may be affected by incorrect assumptions or by known or unknown risks and uncertainties and may differ materially from results ultimately achieved. Returns are not guaranteed.
3. Weighted average lease expiry (by income) as at 1 October 2019. The WALE excluding the 694 bay car park leased to Wilson Parking is 4.57 years. Occupancy by income.
4. Each asset class will have different characteristics and risks. As a geared investment, the Fund also carries associated financial and leverage risks.
5. As at 31 December 2018 with pro forma adjustments to reflect Centuria Heathley transaction.
