Centuria makes e-commerce play, acquiring six industrial assets for $132m

Centuria Industrial REIT (ASX: CIP) has snatched up six new industrial assets for $132.4 million across Australia’s eastern seaboard in a bid to reach more e-commerce operators with close proximity to densely populated areas. 

The most expensive buy is an eight-hectare site in Campbellfield, Victoria purchased for $37.7 million which will deliver a sustainable 44,000sqm five-unit industrial estate in partnership with Cadence Property Group once a short-term lease on the property has expired.

CIP also secured a further three properties in the Victorian suburbs of Derrimut, Port Melbourne and Clayton South, with two of the purchases adjoining pre-existing assets on Studley Court and Wharf Road.

“One of CIP’s strategic focuses is to provide investors with exposure to urban infill industrial locations that cater to last-mile, e-commerce operators,” CIP fund manager and Centuria head of industrial Jesse Curtis said.

“The urban infill locations of these eastern seaboard acquisitions provide a favourable leasing outlook for rental growth, underpinned by near zero vacancy, buoyant tenant demand and limited land supply.

“These conditions provide opportunities to extract outsized returns from the assets.”

The purchase of 5/243 Bradman Street in Queensland sits within the Westridge Industrial Park in the urban infill market of Acacia Ridge, where it is leased to Brisbane-based hardware distributor Lincoln Sentry.

8 Hexham Place adds to the company’s recent acquisition of 160 Newton Road and 164-166 Newton Road assets, creating a 5.3-hectare landholding in Sydney’s central-western industrial market.

One of Australia’s largest pure-play REITs, CIP's industrial portfolio comprises 36 per cent in distribution centres, followed by 25 per cent in manufacturing, 15 per cent in data centres, 14 per cent in transport logistics and 8 per cent in cold storage.  

Construction on the Campbellfield site will endeavour to achieve a five-star rating from the Green Building Council of Australia and is expected to commence in 2023.

“The Campbellfield site provides a rare, value-add opportunity to deliver a much-needed new and sustainable multi-unit industrial estate to attract high-quality tenant customers and premium rents,” said Curtis.

The acquisitions bring CIP’s total portfolio circa $4 billion and will be funded by new and existing debt facilities.

The acquisitions are as follows:

1.     90-118 Bolinda Road, Campbellfield VIC ($37.7 million)

2.     590 Heatherton Road, Clayton South VIC ($27.5 million)

3.     5/243 Bradman Street, Acacia Ridge QLD ($26.5 million)

4.     159-169 Studley Court, Derrimut VIC ($17.1 million)

5.     8 Hexham Place, Wetherill Park NSW ($12.2 million)

6.     43-49 Wharf Road, Port Melbourne VIC ($11.5 million)

“The purchase of this portfolio marks a strong start to 2022 and continues to demonstrate CIP’s management capability to source and execute on strategic acquisitions.”