Centuria pays Telstra $416.7m for Clayton data centre

The 3.2 hectare holding contains 10 buildings including this recently completed 6.1MW data centre, off Treforest Drive (images: Google Street View).

Telstra has sold a multi-building data centre in Clayton with a leaseback to Centuria Industrial REIT (CIP).

The $416.7 million deal is expected to settle by the end of the month.

At that stage, a 30 year rental agreement will kick in.

In 2050, Telstra will be presented with the first of two 10 year (renewal) options.

The triple-net lease structure means the tenant will pay for ongoing operations, building upgrades and repairs, future capex requirements and security.

When the asset was mooted for sale in May, the price guide was c$400m.

Given the land zoning, technically this deal is Australia’s most valuable single industrial transaction. Research houses however, including those agency-based, classify data centres as offices, too.

Telstra’s Clayton data centre

At 1816-1862 Dandenong Road, the 3.2 hectare property contains 10 buildings including a recently constructed 6.1MW data centre (which isn’t the biggest on the site).

It also has second street access – to Treforest Drive.

Telstra chief executive officer Andrew Penn said the disposal is part of the company’s T22 strategy “which is cutting costs and simplifying its business” (story continues below).

“As part of T22 we have an ambition to monetise up to $2 billion worth of assets to strengthen our balance sheet,” the executive said. “This deal means we now have reached over $1.5b”.

“Data centres are an incredibly important part of the digital ecosystem and we continue to own and operate world-leading facilities in Australia and overseas”.

The Clayton property is about 24 kilometres south east of Melbourne.

Elsewhere in the city recently Telstra sold a small townhouse development site at the rear of an exchange in Hampton Park – just over 20kms south east of 1816-1862 Dandenong Road.

It is also trying to offload a c$7m tract which could make way for a high rise tower, behind another exchange, in Box Hill, 14km east of town.

Cookie maker and cookie collector: Centuria’s latest leaseback tenants

CIP shares were placed in a trading halt following today’s sale announcement; the purchaser is now seeking to raise $341m.

The Telstra acquisition comes eight months after the fund paid Arnott’s $236.2m for two factories, again on a leaseback arrangement, in Brisbane and Adelaide.

A third property offered by the biscuit maker – in Sydney’s Huntingwood – was snapped up for $397.8m by Charter Hall for two of its funds.

In the past 21 months that group has also purchased investments from occupiers including Aldi, the federal government (for Australian Border Force and National Archives of Australia), Beacon Lighting, GWA Group (Caroma tap wear’s producer and distributor), Greenacre Developments, Village Roadshow and Viridian Glass.

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Marc Pallisco

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