Centuria has boosted the value of its open-ended Diversified Property Fund (CDPF) with two industrial investments.
In the biggest deal, the manager has purchased a 5.4 hectare site on a funds through basis at Direk, about 27 kilometres north of Adelaide.
The property, 36 Caribou Drive, is set to make way for a 21,160 square metre warehouse and 820 sqm office pre-committed for 15 years to Apex Steel Suppliers.
With an end value of $38.25m, the asset, which Sagle Constructions was approved to construct in April, will occupy just 40 per cent of the parcel, allowing future development.
The site is in the same estate – Walker Corp’s Vicinity Industrial Base – where Centuria’s Industrial REIT (CIP) holds an investment rented to Fisher & Paykel.
Cahill Transport, Hentschke Transport, Lindsay Transport, Nick Scali, SCF Containers and Toll are amongst other businesses also based there.
Next door to the proposed Apex property, Cromwell last year sold a facility occupied by Rand Refrigeration Logistics to Moelis for $63.05m, 19pc over book value.
In Malaga, 11 kms north of Perth, Centuria has paid $11.75m for a 1.8ha maintenance depot built in the 1980s for Transpacific Cleanaway – a subsidiary of Cleanaway Waste Management.
At 171 Camboon Road, it contains a 3227 sqm office, workshop with canopies and truck wash facilities.
Structures occupy just 18pc of the block.
The occupier’s lease expires in 4.3 years.
CDPF value balloons
Including the Direk and Malaga acquisitions, CDPF holds six properties, nine indirect investments via Centuria unlisted funds, AREIT assets and cash like products – all up worth $242m.
It didn’t hold warehouse product until today – industrial now comprises 21.5pc of the trust’s portfolio by value.
The fund’s Weighted Average Lease Expiry has also increased – from 3.65 years to 5.17 years (story continues below).
Occupancy is 98.9pc.
To finance the latest acquisitions, the manager has launched a $30m capital raising exercise.
CDPF was established in June, 2016; since, it has delivered unitholders a 12.96pc annual net return.
Its other directly held assets are offices at 25 Montpelier Rd, Bowen Hills (Brisbane), 10 Moore Street, Canberra, and 13-15 Compark Circuit, in Melbourne’s Mulgrave.
Industrial product nudging $5m
The Direk and Malaga properties bring to $4.8 billion the value of industrial product managed by Centuria.
“There is strong appetite from retail investors to secure quality industrial logistics assets that deliver compelling yields, especially in this low interest rate environment,” joint chief executive officer Jason Huljich said.
“We have seen this for our unlisted, fixed-term Centuria Industrial Income Fund No 1, which was oversubscribed in February with more than $40m raised predominantly from mum and dad investors, and in New Zealand we raised approximately $110m for the single-asset Visy glass manufacturing fund,” he added.
“These market conditions often attract the interest of offshore institutions, which is why we aim to secure Australian assets for Aussie retail investors through our unlisted fund offerings”.
Centuria head of funds management, Ross Lees, added the Direk and Malaga acquisitions support investors’ appetite for the industrial asset class.
Last month, for CIP, the manager outlaid $86m for three warehouse investments – including in Melbourne, at Broadmeadows and Epping, and Sydney’s Wetherill Park.
In May the same fund acquired a Victorian industrial park worth $88.8m from Cadence Property Group, again on a funds-through basis.
Earlier this year Centuria made a successful takeover bid for Primewest.
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