Projected improvement in Brisbane office market fundamentals drives unlisted fund

5 April 2017

Centuria has purchased 1231 Sandgate Road, Nundah for $106.25 million to form a new unlisted property fund

Centuria Property Funds today announced the launch of its latest unlisted fund, Centuria Sandgate Road Fund (the Fund). The property was acquired this week for $106.25 million. Combined with other acquisitions made this financial year, it will increase Centuria Capital’s total funds under management (FUM) by $457 million to $3.8 billion.

The Fund is a single-asset unlisted property fund, and will own 1231 Sandgate Road in Nundah, Brisbane. The property is a modern A-grade office, centrally-located in the up-and-coming metropolitan centre of Nundah, where it is well-positioned to benefit from projected improvement in Brisbane office market fundamentals. The property has a 4.5 star NABERS rating, is 12,980 square metres and is 100% let, with a weighted average lease expire (WALE) of 9.3 years.

The initial term of the trust is six years, with a forecast distribution of 6.5% in year one and 7.0% in year two.

Centuria CEO, Unlisted Property Funds, Jason Huljich, said high-quality well-leased office property is ideally suited to long-term investors.

“Sandgate Road is located in a high-growth area of Brisbane where over 1,000 new dwellings have been built over the past four years. The location is very convenient for office users, being only a 15-minute drive to the Brisbane CBD and Brisbane Port, right next door to Nundah train station, and only an eight-minute commute from town.

“The property is 81% leased to Queensland Government-owned entities, with a very long WALE of 9.3 years; so investors can feel confident that the projected yield is not only attractive but also secure. There is also the added benefit of expected capital growth, as Nundah continues to expand and the Brisbane office market improves,” said Mr Huljich.

In conclusion, Mr Huljich said many metro markets around the country are showing excellent fundamentals.

“At Centuria, we are asset-driven investors, so we believe that a quality property can provide our investors with stable yields and strong returns over time in any market. Our track record of success in managing unlisted funds speaks for itself, and we expect overwhelming demand for this latest investment. Its long WALE, quality tenant profile and low-geared structure should appeal to a wide range of investors.” said Mr Huljich.