Centuria, Morgan Stanley form industrial partnership

Southside, in Dandenong South, cost Centuria $88.8 million last April.

Nine months after forming an alliance to buy and develop healthcare product, Centuria, for its Industrial REIT (CIP), and Morgan Stanley Real Estate Investing, have struck a similar agreement – for industrial property.

The former Furniture Galore distribution centre, in Epping, was worth $19.2 million last June.

The Centuria Prime Logistics Partnership will be seeded with eight CIP assets – all on the east coast.

Each trust will hold a half stake – MSREI’s share is costing $180.9, reflecting a 4.7 per cent yield.

Centuria entities will be appointed administrator, manager and where required, development manager.

The group will use sale proceeds to reduce CIP debt and gearing.

CBRE’s Chris O’Brien was the agent.

Partners reunite

The CPLP deal is somewhat different to the healthcare one (the Centuria Prime Partnership), where MSREI holds a 90pc stake.

Centuria did however tip in three assets worth a similar value – $210m (story continues below).

Centuria sold the outgoing Garmin distribution centre at Eastern Creek in June.

The seed industrial properties include, in Melbourne, a newly completed and fully occupied business park, Southside, at 95-105 South Gippsland Highway, Dandenong South (pictured, top) – an asset itself worth c$90m – and warehouses in the north (40 Scanlon Drive, Epping) and west (69 Studley Dve, Derrimut).

Three more investments are in Sydney – 8 Lexington Dve, Bella Vista, 29 Glendenning Road, Glendenning and 52-74 Quarry Rd, Erskine Park.

The balance are at Brisbane’s Bundamba, near Ipswich – 1 Ashburn Rd and 42 Hoepner.

Settlement is scheduled this month.

“The forming of this partnership demonstrates the resilience of CIP’s portfolio and the continued demand for high quality industrial assets within urban infill markets in which CIP operates,” fund manager and Centuria head of Industrial, Jesse Curtis, said.

The partnership comes six months since the fund manager sold the soon to be vacated Garmin distribution centre at 30 Clay Place, in Sydney’s Eastern Creek, for $33m – a 37pc premium to the then book value – to an offshore investor.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.