Sydney manager seeds fund with enormous Melbourne investment
A large, modern Melbourne industrial investment facing vacancy in two years has been bought by Centuria to seed a trust chasing counter cyclical product or to finance it.
The Keysborough property is setting the manager back $20.631 million – or some 40 per cent of a recent ($50m) raising from wholesale investors – for the Centuria Select Opportunity Fund.
The entity’s life cycle is five years.
Centuria will invest, considering all sectors, over the next 15 months.
It will also financially back opportunities by other parties.
A 15pc internal rate of return is expected.
CBRE’s Andrew Bell and David Aiello were the agents.
Madad Investments was the seller; the deal reflects a c5.04pc net passing yield.
The property forms part of Frasers Property Industrial’s The Key estate, where the Pratt family’s Kinrise recently committed to an office/warehouse for an initial three years.
CSOF seeded
On 1.94 hectares, 93-103 Pacific Drive contains a seven year old, 8745 sqm facility, occupied by hospitality equipment designer ISH design since 2018.
The office component spreads 500 sqm.
The warehouse, with a clearance up to 12.2 metres, has full drive around access and a 10m awning (story continues below).
Also fronting Perry Rd, the site contains 1500 sqm of hardstand and 86 car parks.
“The short two year weighted average lease expiry provides a value-add opportunity to generate positive rent reversions in line with market asking prices today,” Centuria joint chief executive officer, Jason Huljich, said.
Under-rented: Centuria
Described as “under-rented” by Centuria, the building occupies 45pc of the site in a precinct with a sub one per cent industrial vacancy; longer term, multi-level product could be considered, Keysborough an infill suburb 27 kilometres south east of Melbourne’s CBD, abutting established commercial hubs, Dandenong and Dandenong South.
“The property also provides access to 1.5 million households within an hour’s drive time,” Mr Huljich said.
“We are looking at high quality assets that can provide value-add opportunities such as positive rental reversion,” he added, of CPOF.
“We are also looking at industries with strong tailwinds that lend themselves to supply-demand imbalances and growth opportunites,” according to the executive.
“The fund is also targeting direct and indirect investments that lend themselves to the capabilities of our inhouse real estate team, such as leasing, repositioning, refurbishment and development, as well as real estate credit opportunities.
“Centuria is co-investing alongside our wholesale investors because we believe in this high conviction investment strategy”.
The acquisition comes a week since we reported the manager was acquiring a Wetherill Park, Sydney, industrial amalgamation – to date worth c$107m.
Subscribe to our newsletter at the bottom of this page.
