Centuria picks up four investments with development upside

At the north west corner of Briggs Drive, 30 Fulton Drive covers a 2.68 hectare block.

Centuria, for its Industrial REIT (CIP), has spent $129.4 million on four east coast investments with development upside.

The Cooper Plains investment is 11 per cent vacant.

In the biggest deal, the group is paying $70m for a distribution centre on 4.34 hectares at 82-92 Rodeo Drive, Gregory Hills (pictured, top), 45 kilometres south west of Sydney.

Developed in 2016 by Fordham Industrial Enterprises following a pre-commitment by GMK Logistics – it was originally c16,500 sqm.

Following an extension two years later, the lettable area became 22,439 sqm.

The Weighted Average Lease Expiry is 4.2 years.

The purchase price reflects a 3.7 per cent yield.

In Melbourne, Centuria has spent $20.6m on an industrial investment at 30 Fulton Drive, Derrimut.

The vendor, Signode Australia, offered it with a two year leaseback.

Covering 2.68ha, the asset includes a 10,733 sqm improvement which spreads over just 40pc of the block.

This deal reflects a 4.9pc return.

Meanwhile, in Port Melbourne, Centuria is paying Wayne Sidwell $18 million for a 2392 sqm office/warehouse at 870 Lorimer Street.

The vendor’s Wellcom Worldwide occupies the 3400 sqm property on a lease expiring in 2.5 years (story continues below).

The yield for this sale is 4.1pc.

The fourth investment, 55 Musgrave Road, Cooper Plains, 15 kilometres south of Brisbane, is costing $20.8m – a price also reflecting a 4.1pc return.

On 2.11ha and containing 10,836 sqm split as four tenancies, it is 11pc vacant; the WALE is 3.4 years.

Colliers’ Gavin Bishop, Sean Thomson and Fab Dalfonso brokered the Sydney deal, while colleagues Simon Byrne and Levi Maxwell sold the Brisbane asset.

CBRE’s Ben Hegerty was the agent for Derrimut while Dawkins Occhuito’s Chris Jones and Walter Occhiuto marketed Port Melbourne.

Development upside

The blended yield for the four properties is four per cent.

“The acquisitions lend themselves to last-mile logistics and distribution tenant customers and benefit from strong tailwinds across Australia’s industrial sector, particularly from the strong rise in ecommerce adoption and supply chain onshoring,” CIP fund manager and Centuria head of Industrial, Jesse Curtis, said.

“These assets align with CIP’s strategy to acquire assets located in land constrained urban infill markets, where tenant demand currently outstrips forecast supply,” he added.

“The portfolio of assets provides a number of opportunities to actively manage the portfolio to value-add through capturing outsized rental growth from under-renting of the assets and potential development or activating higher and better potential use,” according to the executive.

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Marc Pallisco

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