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Centuria Industrial REIT acquires $43m Ormeau cold storage warehouse

1 Lahrs Road, Ormeau, Queensland

  • Modern 9,554sqm cold facility in Ormeau, QLD, acquired with an initial yield of 5.5%
  • 6.5-year WALE, 100% occupied
  • Capitalises on demand for cold storage facilities, which currently outweighs supply
  • Services the non-discretionary food related market.

Centuria Industrial REIT (ASX:CIP) has acquired a 9,554sqm cold facility in Ormeau, Queensland, for $43m on an initial yield of 5.5%, a strategic play to capitalise on the rising demand for cold storage facilities which currently outweighs supply¹. The acquisition takes CIP’s total investment for 2020 to more than $0.523 billion, making it the one of the largest acquirers of Australian industrial real estate within the calendar year and FY21.

CIP is Australia’s largest ASX-listed domestic pure-play industrial REIT with assets under management expanding to 56 properties worth more than $2.1 billion². Within Queensland, it has a 15-asset portfolio. Jesse Curtis, CIP Fund Manager, said, “A key growth thematic for CIP is the non-discretionary, food distribution and cold storage industries and this facility increases the Trust’s exposure to food and cold storage related users to almost 30% by income. “There has been increased demand for refrigerated distribution centres¹, especially throughout the COVID-impacted months as online grocery shopping has increased. Additionally, there has been rising demand from both food and pharmaceutical related users requiring climate-controlled facilities. This is creating an environment where tenant demand is outstripping supply.”

The modern Ormeau facility was constructed in 2015 and provides a minus-22 degree Celsius main chamber and a minus-28 degree Celsius blast chamber, which would appeal to a broad range of cold store users within the non-discretionary food related markets. The property is 100% occupied by Markwell Cold Storage, a subsidiary of Competitive Foods Australia – one of the largest privately owned companies in the Australasia food sector. It is a well-known handler of imported foods, quarantine foods, export foods and Halal meat with household-known customers including Coles, Woolworths and Bulla Ice Creams.

The asset provides a WALE of 6.5 years at acquisition. Ross Lees, Centuria Head of Funds Management, added, “This quality asset complements the existing array of high-quality assets underpinned by blue-chip tenant customers within the CIP portfolio. “We are confident cold storage is a rising sub-market due to its long-term leases, strong tenant covenants, and unmet investment demand for this type of industrial facility.” The Ormeau asset is a further addition to CIP’s asset base providing refrigerated space, along with the recently expanded Townsville Regional Distribution Centre constructed for Woolworths, which was officially opened last Friday 2 October.

Positioned in the Yatala Enterprise Area, a key corridor between Brisbane and the Gold Coast, the site totals 2.1ha. It is located at 1 Lahrs Road, Ormeau. The acquisition will be funded with CIP’s existing debt facilities. The asset was acquired from a mandate managed by ESR Australia.

  1. According to JLL research on the Cold Storage Sector and the Industrial Investment Market.
  2. As at 2 October 2020, including acquisitions that have exchanged and are yet to settle.