Centuria Industrial REIT (CIP) is paying $236.2 million for two Arnott’s factories, in Brisbane and Adelaide.
The sale-and-leaseback agreements come five months after the biscuit maker was acquired by US-based global investment house KKR in a $3.14 billion deal.
KKR immediately appointed UBS and CBRE to sell three of Arnott’s owner-occupied properties.
With a total lettable area of 131,322, the portfolio return an initial yearly rent of $38 million.
CIP snaps up two of three Arnott’s sites
CIP’s largest new asset, 46 Robinson Road, East Virgina, north of Brisbane, is costing $211.8 million.
Purpose-built for Arnott’s, it includes 44,785 square metres of lettable area and sits on a 7.2 hectare block with a multi-level car park, driveways and manoeuvring areas.
It is trading on a 5.8 per cent passing yield.
Arnott’s offered it with a 30 year leaseback.
A smaller industrial property, 23-41 Galway Avenue, Marleston – in Adelaide’s south west, is trading for $24.4 million.
Containing 23,593 sqm of area – configured as a factory, workshop, administration area, staff canteen, storage and silo housing – it sold with a 12-year leaseback to the biscuit maker.
Based on the starting rent, it is selling on a 7.4 per cent yield.
This week, the Charter Hall WALE REIT and Charter Hall Prime Industrial Fund outlaid a total of $397.8 million for Arnott’s landmark 59,000 square metre Huntingwood, Sydney, factory – the third investment KKR offered.
CIP post property reweighting
Following the Arnott’s factory deals, CIP – Australia’s largest pure play industrial REIT – has more than $1.5 billion worth of assets under management.
Its weighted average lease expiry has increased from 4.4 years to 7.2 years.
CIP also announced today that nine of the 46 properties in its portfolio have been revalued as at December, 2019.
All up, the appraisals showed a $19 million – or 9.5 per cent – capital gain, since the last quarter.
To help finance its Arnott’s acquisitions, CIP will undertake a $154 million underwritten institutional equity raising initiative, with a unit price representing a 3.9 per cent discount to the previous closing value.