Centuria fund to secure $201 million for Sydney and Melbourne office acquisitions

Centuria Office REIT (ASX: COF) is rattling the tin to partially fund the acquisitions of two office properties in Melbourne and Sydney with a combined price tag of $273.1 million.

According to COF, the acquisitions will consolidate its position as Australia’s largest listed pure-play office REIT with a $2.3 billion portfolio of office assets.

To partially fund the acquisitions, COF is looking to raise $201 million by issuing new shares at $2.50 per unit - a 3.5 per cent discount to the last closing price of $2.59 per share on 3 September 2021.

The deals are for 101 Moray Street, South Melbourne (worth $205.1 million) and 203 Pacific Highways, St Leonards (worth $68 million) in the lower North Shore of Sydney - both office properties strategically located in key metropolitan areas.

“101 Moray Street is located in the attractive near city location of South Melbourne, just one kilometre from the Melbourne CBD. The area has become a desirable location for Melbourne tenants, particularly tech and media, as South Melbourne offers iconic retail amenity with access to key transport infrastructure,” COF fund manager Grant Nichols said.

“203 Pacific Highway is located in the heart of the St Leonards business precinct, directly above the entrance to the railway station, approximately four kilometres north of the Sydney CBD. An established metropolitan office market, St Leonards’ connectivity will be further improved by the Sydney Metro infrastructure project.

“The acquisitions are strongly aligned with COF’s stated strategy and deliver several benefits including broader geographic diversification, high occupancy, young assets with sustainable and affordable rent profiles and an enhanced portfolio WALE.”

COF currently owns a 50 per cent interest in 203 Pacific Highway, with the remainder being acquired from another Centuria-managed fund.

As such, approval from COF shareholders by an ordinary resolution is required for the acquisition. Approval will be sought at a shareholder meeting on Friday, 29 October 2021.