Centuria seeds fund with $62.5m spree

The Gillman property, near Port Adelaide.

Centuria Capital Group has spent $62.5 million on three warehouse investments to seed an unlisted fixed-term fund.

Two of the properties, including one worth $39.6m, are in Brisbane, with the other in Adelaide.

Their Weighted Average Lease Expiry is 9.1 years.

Centuria Industrial Income Fund No 1 (CIIF1), which launches on February 1, will hold them.

The sale prices reflect a blended 6.85 per cent initial yield. The capitalisation rate is 5.97pc.

CIIF1 seed assets

In the biggest deal, Centuria is buying a 16,000 square metre facility at 136 Zillmere Road, in Brisbane’s north Boondall, tenanted to Bradnam’s Windows and Doors until 2031.

On the other side of the city at 2-6 Titanium Court, Crestmead, the fund has outlaid $12.4m for a c5000 sqm warehouse rented to Vulcan Steel (pictured, top), also for 10 years.

The third property measuring c7200 sqm at 68-70 Kapara Road, Gillman, near Port Adelaide, is costing $10.5m (story continues below).

It is leased to ACFS Port Logistics until 2024.

All investments are in established industrial areas.

“Centuria has a strong track record with actively managing industrial and logistics properties nationwide as evident by our ASX-200 listed Centuria Industrial REIT, which is Australia’s largest listed pure-play industrial fund,” Centuria head of Funds Management, Ross Lees, said.

“We aim to replicate the strong performance of CIP through this unlisted pure-play industrial fund”.

CIIF1 manager Stuart Wilton added the sector “has experienced strong tailwinds throughout the past 18 months, accelerated by a growth in online retail throughout the COVID affected period, which is consequently driving demand for warehouse space and logistics hubs”.

The six year trust is forecast to distribute six per cent this financial year and 6.25pc in FY22.

Centuria is seeking to raise $40m for it by the end of February.

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Marc Pallisco

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

Marc Pallisco