Mackay distribution centre collects $35.5m from fund manager

The Paget asset contains two buildings occupied by Wesfarmers subsidiaries.

Centuria has purchased an industrial investment with development upside at Paget, six kilometres south of Mackay.

The three hectare Wesfarmers backed asset, 69-79 Diesel Drive, set it back $35.5 million reflecting a 7.55 per cent net market yield, or 7.24pc equivalent market return.

It will be held in a single asset fund – the Centuria Industrial Investment Fund No 2 – now seeking investors, for $22.4m.

Colliers’ Simon Beirne was the agent.

69-79 Diesel Drive

Near Mackay Airport and rail intermodal terminal, the Paget property contains two buildings, all up with 13,843 square metres.

Blackwoods occupies the predominant one, with 18 loading bays, 13 metre clearance and 12 metre canopy’s to each side, as well as a showroom and modern offices.

A smaller warehouse is tenanted to Coregas, another Wesfarmers subsidiary.

The Weighted Average Lease Expiry is 6.1 years.

Rent rises are fixed to inflation.

“This central Queensland acquisition captures the strong tailwinds of the domestic industrial market while harnessing the sector’s robust rental growth, driven by low vacancy rates and constrained supply,” Centuria joint chief executive officer, Jason Huljich, said.

“Furthermore, Mackay is strategically positioned to service a significant North Queensland catchment area including Cairns, Townsville and Mount Isa, he added (story continues below).

Buildings and awnings cover a low 46 per cent of 69-79 Diesel Drive.

Elsewhere in the town, Sentinel Property Group in May agreed to purchase Caneland Central shopping centre for $280m from Lendlease managed Australian Prime Property Fund Retail.

That group also holds Mount Paget’s Northpoint shopping centre.

In Paget, Sentinel owns a significant portfolio including a warehouse at 512 Milton Street which cost $7.75m in February.

Development upside

Over half (56pc) the near-level Diesel Dve property with two street frontages is undeveloped which, Mr Huljich said, “could potentially extract further returns for our investors”.

CIIF2 will run five years.

The minimum investment is $50,000.

Centuria is promising a 6.5pc first year return rising to 6.75pc in the 2024 financial year.

The launch comes eight months since the manager raised $40m for the Centuria Industrial Income Fund No 1, with four assets worth a total of $89m – the first three which were acquired early last year.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of