COMMERCIAL PROPERTY, SALES & LEASINGREAL ESTATE INVESTMENT TRUSTS & FUNDS

Centuria grabs industrial duo on 5pc yield

40 Scanlon Drive Epping
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CENTURIA Industrial REIT (CIP) has increased its portfolio beyond $3 billion with the $86.1 million off-market acquisition of distribution centres and a manufacturing facility in Melbourne and Sydney.

The fully leased properties were bought on a blended initial yield of 5.0% and with a weighted average lease expiry of 5.8 years. CIP’s portfolio is now worth over $3.0 billion following the acquisitions and another strong round of portfolio valuation uplifts amid intensive demand for warehousing and logistics facilities during the pandemic.

CIP has increased its northern Melbourne landholdings with the acquisition of 40 Scanlon Drive, Epping and 110 Northcorp Boulevard, Broadmeadows, adding to the six existing industrial properties within the area and creating a collective value of $219 million.

The 15,704 sqm Broadmeadows property was picked up for $37.1 million, on a 4.9% initial yield, with a lease to global window coverings systems manufacturer and distributor Rollease Acmeda. It has an 11.4-year WALE and is on 3.1 hectares of land.

110 Northcorp Boulevard, Broadmeadows

The Epping acquisition spans 1.8 hectares and has a 9,371 sqm modern facility leased to tortilla producer Gruma Oceania Pty Ltd – better known as Mission Foods – and removalists GCP Applied Technologies with a 2.8 year WALE, acquired on a 5.5% yield.

In Sydney’s outer central west, 160 Newton Road in Wetherill Park was bought for $33.5 million, on a yield of 4.9%, with a short 0.9 year WALE. It has a 13,233 sqm distribution centre on a 2.2 hectare site in an “industrial precinct characterised by limited land supply and vacancy rates of less than 1.0%”, CIP said. The trust already owns 74 Newton Road.

“The three assets were secured off-market and continue to grow CIP’s exposure to the highly-sought after and tightly held infill industrial markets of Melbourne and Sydney,” CIP fund manager, Jesse Curtis said.

“The portfolio provides a rare mixture of short WALE assets, providing the opportunity to add-value and take advantage of low vacancy rates through strategic leasing, while also adding a core long WALE asset.

“These acquisitions continue to build on our strong track record of identifying value and providing value-add opportunities through repositioning and active leasing to deliver reliable income returns and capital growth to our unitholders.”

The transaction will be funded through existing debt facilities.

CIP’s portfolio has an occupancy of 98.8% and WALE of 9.7 years.