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Centuria today announced the purchase of 25 Montpelier Road, Bowen Hills, Queensland for $65.4 million. The A-grade office, purchased by Centuria Diversified Property Fund (CDPF, the Fund), is the third direct property purchase by CDPF this year, and will take the Fund’s total assets under management toward $200 million.
Bowen Hills is located on the fringe of the Brisbane CBD, and 25 Montpelier Road is within walking distance of the Bowen Hills train station, as well as the lively Gasworks precinct with its mix of popular restaurants, bars, shops and greenspaces. The property is 100% leased and has a 6.0-year weighted average lease expiry (WALE) (as at 1 December 2019). The property has approximately 7,000sqm of office space and an additional 700 sqm of ground floor retail.
Commenting on the purchase, Centuria’s Joint CEO, Jason Huljich, said it is in line with the group’s strategy to accelerate AUM growth, and with the Fund’s strategy to increase its balance of direct property exposure for its investors following on the heels of two acquisitions earlier this year – 381 Macarthur Avenue, Northshore Hamilton, QLD for $19.7m, and 10 Moore Street, Canberra for $35.0m.
“This is CDPF’s third direct acquisition. Brisbane markets are steadily improving with continuing yield compression and decreasing vacancy rates.”
“The Fund’s strategy is to buy properties that enhance the quality and diversity of its portfolio and contribute to strong distribution returns for its investors.”
Mr Huljich went on to say that Centuria offers a range of A-REIT and unlisted property fund options for investors and that CDPF offers some of the benefits of both structures.
“CDPF aims to offer direct property investment and returns similar to those from unlisted property funds, but because it is open-ended and offers some liquidity, it sits on a number of platforms and wrap platforms so is easy for advisers and smaller investors to access.
“This latest acquisition in Queensland will further diversify the portfolio by adding to our holdings in Brisbane, a market where we expect to see growth ramp up in the next six to twelve months. Vacancy rates are falling, net absorption is up, and this means that effective rental growth is very likely to follow, particularly as infrastructure projects currently in the works start to come online,” Mr Huljich said.
25 Montpelier Road, Bowen Hills QLD is a A-Grade quality office asset constructed in 2009. The asset is 100% leased with a 6.0-year WALE (as at 1 December 2019), underpinned by a strong tenant mix.
The building is located within short walking distance to the Gasworks precinct which offers tenant amenity, including restaurants, bars, shopping and green spaces.
The property has a net lettable area of 7,739sqm, with 7,005sqm of office space and 734sqm of ground floor retail. It also has 115 car spaces.