Transactions drive Centuria Industrial REIT’s growth
- Three urban infill acquisitions; combined estimated end value of $59 million1
- 2.5 ha Canning Vale WA site with c.$31 million end value
- 1.25 ha Direk SA site with c.$16 million end value
- $12 million Derrimut VIC industrial facility; grows nine-asset sub-portfolio to $241 million, across 25.3 ha.
- $34.5 million Eastern Creek NSW divestment; 37% premium to 31 December 2021 book value2.
Australia’s largest listed pure play industrial fund, Centuria Industrial REIT (ASX:CIP), today announced it acquired two development sites and a strategic investment property, providing a collective estimated end value of $59 million1, while divesting an asset for $34.5 million2, delivering a 37% premium3 to book value.
The development sites expand CIP’s strategy to deliver high quality assets in supply constrained markets where vacancy rates are limited while the REIT’s divestment provides an opportunity to immediately deploy proceeds back into accretive value-add development initiatives.
Jesse Curtis, CIP Fund Manager and Centuria Head of Industrial, said, “Divesting of a non-descript asset presents an opportunity to recycle capital into higher yielding strategic acquisitions and developments. 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.
“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.”
The 2.5 ha brownfield site, located at 204-208 Bannister Road, Canning Vale WA, was acquired for $10.1 million and has an estimated value on completion of $31.1 million, which would provide a forecast 5.25% yield on cost. The development will deliver c.12,300 sqm of modern sustainable industrial product with a targeted 5 Star Green Star rating. Completion is expected in Q4 FY23.
The 1.25 ha site, located at Lot 16 Caribou Drive, Direk SA, adjoins CIP’s existing 9-13 Caribou Drive property and consolidates a 3.0 ha landholding in Adelaide’s north. The land was acquired for $2.3 million and has an estimated value on completion of $16 million with a forecast 6% yield on cost. CIP will construct a 6,900 sqm industrial facility as a stand-alone tenancy or extend its adjoining warehouse.
The 95 Fulton Drive, Derrimut VIC acquisition adds to CIP’s site consolidation in the area, totalling nine assets across 25.3 ha worth a collective $241 million. This builds on CIP’s strategy to create scale within land-constrained infill markets.
The 5,331 sqm property is 100% occupied, has a short 0.7 year WALE and provides a value-add opportunity to deliver positive near term rental reversion. The asset was acquired for $12 million, reflecting a 4.25% capitalisation rate.
CIP is divesting a 6,020 sqm non-descript asset at 30 Clay Place, Eastern Creek NSW for $34.5 million, representing a 37% premium to the prior book value of $25.2 million3. The property comprises 48% of office space and has a site coverage of 55%.
1. Includes 204-208 Bannister Road, Canning Vale WA and Lot 16 Caribou Drive, Direk SA estimated development value on completion
2. Divestment is subject to Foreign Investment Review Board (FIRB) approval from the purchaser
3. 31 December 2021 book value of $25.2 million.
Centuria Capital Group secures a $70.6million industrial logistics facility in North Rocks, NSW, on behalf of US private investment firm, Starwood Capital’s, Last Mile Logistics Partnership (LMLP).
Centuria Capital Group has successfully exchanged conditional contracts to divest two adjoining industrial facilities located at 114 and 120 Old Pittwater Road, Brookvale NSW, which is anticipated to deliver a forecast 13.8% IRR to the assets’ closed-ended fund investors.