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Centuria secures $22m Royal Park industrial facility, SA from Centennial

Third asset for counter-cyclical wholesale opportunities fund

  • Dual-tenancy industrial facility secured at a significant discount to estimated replacement value
  • Value-add opportunity to capitalise on medium-term rent reversions
  • Leased to blue-chip tenants, Daikin Australia and Allied Express Transport, providing 6.3-year WALE

Australasian real estate funds manager, Centuria Capital Group (ASX: CNI or “Centuria”), has secured a third asset for its wholesale unlisted fund, Centuria Select Opportunities Fund (CSOF or “Fund”), a $21.9 million dual-tenant warehouse facility in a prime industrial precinct, 11km northwest of Adelaide’s CBD.

Located at 7 Brandwood Street, Royal Park SA, the premium asset is the Fund’s third property. It provides a value-add opportunity for wholesale investors being secured significantly below estimated replacement cost. Additionally, with current rental values substantially below market rents, there is further opportunity for positive rent reversions in the medium term.

The transaction improves the Fund’s return profile and geographic diversity by adding a fully leased high-quality infill industrial asset. The transaction is part of CSOF’s 15-month1 capital deployment campaign and the transaction places the Fund within its 15% IRR target2.

Jesse Curtis, Centuria Head of Funds Management, said “We launched CSOF in late 2023 and have secured three quality assets for it during the calendar year, all of which provide compelling value-add propositions for our investors.

“Our inhouse team has sourced properties that lend themselves to upward rent reversions, with a potential to increase underlying values. This strategy plays to Centuria’s strengths having a demonstratable track record for executing leasing, repositioning and development projects that improve properties’ performance.

“We are capitalising on non-core divestment opportunities within the market to extract outsized returns for our investors and the Royal Park facility enhances CSOF’s diversification by location and tenant profile.”

Centennial’s Executive Director Paul Ford, said the group was “delighted with the sale of the facility” which emphasised the national fund manager and developer’s expertise in identifying, acquiring with functional improvements at or below land value and transforming, mid-space infill logistics sites into sustainable institutional-grade investments.

“The Royal Park site had sat vacant for many years before we acquired it in 2021, however its location and functional yet dated existing improvements enabled us to refurbish the facility, achieve strong environmental credentials via our “Regen” strategy and fully lease it prior to works being completed.”

The premium 12,700sqm industrial facility sits within a 3.1ha corner site and provides full drive-around access, extensive hardstand, multiple on-grade roller doors and sustainable features including energy-efficient LED lighting, ESFR sprinkler systems, solar panels, rainwater harvesting and low carbon materials. The asset benefits from a full refurbishment, completed in 2023.

It is well-connected to major transport routes, including the M2 Motorway, Princes Highway and Grand Junction Road.

The property is leased to air-conditioning system provider, Daikin Australia, and courier and express freight company, Allied Express Transport, providing a 6.3-year WALE.

In addition to the Royal Park asset, CSOF’s portfolio includes a $23 million Keysborough VIC industrial facility and an $20 million Wetherill Park NSW warehouse.

Centuria is an ASX-200 listed real estate manager with a track record exceeding 25 years and manages a $21 billion platform including a $6 billion industrial portfolio.3

The Royal Park property was sold via Colliers Gavin Bishop, Sean Thomson and Paul Tierney and CBRE’s Chris O’Brien and Andrew Bell.

  1. From January 2024.
  2. Internal Rate of Return (IRR) net of fees. The rate specified is a target only and is not a forecast. This target is the total return outcome
    of the Fund at the end of the term of the Fund. The IRR target will be a composite return based upon the returns of the underlying investments. The achievement of this target is subject to best endeavours and is not a guarantee of future performance. An investment
    in the Fund is subject to risks, as detailed in the Information Memorandum of the Fund.
  3. As at 30 June 2024.