Australia’s largest landlord energy deal struck between Centuria & Energy Bay

• c.70 MW solar capacity and c.300 MWh battery storage¹ anticipated in up to 240 Centuria assets
• Energy Bay to invest $430 million in renewable energy infrastructure capex throughout a seven-year period
• c.85,000 MWh of renewable electricity expected to be generated each year across Centuria’s identified assets each year²
• Large-scale Generation Certificates (LGCs) expected to support the achievement of Centuria and its A-REITs’ zero Scope 2 emission reduction targets

Australasian real estate fund manager, Centuria Capital Group (ASX: CNI or “Centuria” or “Group”), has signed the nation’s largest renewable energy deal³ among domestic commercial property landlords with leading local distributed energy infrastructure partner, Energy Bay.

The rollout of c.70 MW of new solar infrastructure and 300 MWh of Battery Energy Storage Systems across selected assets within Centuria’s office, industrial, retail and healthcare portfolios will commence this month on up to 240 properties⁴. The infrastructure will be installed in a staged process throughout a seven-year period starting with properties that have existing infrastructure.

Importantly, the transaction is expected to result in a reduction in greenhouse gas (GHG) emissions through the generation of c.85,000 MWh of renewable electricity each year at the properties, which will create associated Large-scale Generation Certificates (LGCs)². Under the Renewable Energy (Electricity) Act 2000, LGCs verify the generation of renewable energy and can be used by corporations to reduce or eliminate their reported market-based Scope 2 emissions.

The LGCs are expected to be retired to achieve Centuria Industrial REIT and Centuria Office REIT’s zero Scope 2 emission targets by 2028 and to support the achievement of Centuria Capital Group’s zero scope 2 emission target by 2035⁵.

Jason Huljich, Centuria Joint CEO, said, “We believe this partnership with Energy Bay demonstrates how sustainability initiatives can also deliver meaningful commercial outcomes across the property value chain. In addition to increasing onsite renewable electricity generation and progressing our scope 2 emission reduction targets, the program is expected to create long-term income opportunities across participating properties, provide access to more competitive energy solutions for tenants who elect to participate and further enhance the resilience and attractiveness of our real estate portfolio.

“We believe the agreement reflects an innovative approach to unlocking additional value from existing property infrastructure while continuing to meet the evolving needs of tenants and investors. It is a pleasure to partner with Energy Bay and we look forward to working together as the program progresses.”

The deal will see Energy Bay lease roof space and operate embedded networks across Centuria’s assets over a 30-year period. The lease structure provides Centuria with additional revenue contributions generated from the Group’s real estate assets. This additional income will increase the participating properties’ Net Operating Income (NOI) and potentially support valuations and contribute income streams for Centuria through management fees.

Additionally, tenants who choose to procure energy from Energy Bay are expected to benefit from lower-cost electricity, which will be delivered by the onsite solar and battery infrastructure.

Approximately 18% of the identified assets already contain embedded network infrastructure and are expected to transition into the Energy Bay program shortly, subject to conditions and implementation requirements. Rental flows from these assets are anticipated to commence during the first half of FY27.

Remaining assets identified for new embedded networks and solar and battery infrastructure are subject to tenant consents, planning approvals and detailed due diligence prior to the commencement of rollout.

Energy Bay is responsible for the capital expenditure works required to install solar panels, batteries and infrastructure upgrades, meaning there is no capital requirement from Centuria nor its tenants. It will invest approximately $430 million of its own capital to deploy infrastructure across a seven-year period.

James Doyle, Energy Bay CEO, said “Centuria’s commitment sets a new benchmark for renewable energy adoption across the nation’s commercial property sector and Energy Bay is proud to lead this shift. This agreement demonstrates how large‑scale infrastructure partnerships can deliver meaningful emissions reductions while creating long‑term value across the industry.

“This partnership enables Energy Bay to deploy rooftop solar assets, onsite battery infrastructure and operate embedded network systems across Centuria’s identified portfolio, delivering cost and sustainability benefits to tenants.”

Centuria manages more than $22 billion of assets under management across Australia and New Zealand including listed and unlisted real estate equity funds, real estate finance and investment bonds.

1. Battery Energy Storage Systems (BESS)
2. One LGC is created from 1MWh of eligible renewable electricity generated. For example, 1 MWp solar system in Sydney is expected to generate approximately 1,350 MWh of electricity per annum; it is therefore eligible to create 1,350 LGCs per annum, subject to eligibility requirements and actual generation.
3. The largest renewable energy transaction by the expected quantity of solar and BESS to be installed across Centuria’s identified portfolio and the largest by the number of real estate assets that have agreements executed upfront to facilitate the rollout of solar and BESS.
4. Values based on completion of infrastructure works across c.78% of identified suitable assets, which are also subject to Development Approvals and other Due Diligence processes.
5. Centuria, COF and CIP will account for zero scope 2 emissions by being powered by the equivalent of 100% renewable electricity through a combination of onsite solar and LGC deals which match their consumption. The zero scope 2 target applies to scope 2 emissions for existing assets that fall under the operational control of Centuria, COF and CIP.