Property investor Centuria is betting big on Tim Tams and Shapes biscuits with the acquisition of two Arnott's factories in Queensland and South Australia for $236 million.
Centuria Industrial REIT (ASX: CIP) will raise $154 million through a $3.41 per unit placement to partially fund the acquisitions, which will be leased back to the iconic snack seller.
Founded in Australia in 1865 and now owned by US private equity firm Kohlberg Kravis Roberts (KKR), Arnott's is also famous for such household names as Jatz, Iced Vovos, Tiny Teddies and Monte Carlos.
The purchase of 46 Robinson Road East in Virginia, Brisbane accounts for the bulk of the expenditure at $211.8 million, while the property on 23-41 Galway Avenue in Marleston, Adelaide is worth $24.4 million.
"The acquisition of these two high quality industrial assets materially increases CIP's portfolio WALE (weighted average lease expiry) and overall scale," says Centuria's head of funds management Ross Lees.
"Following the transaction, the portfolio value will increase to over $1.5 billion cementing CIP's position as Australia's largest pure play industrial REIT and increases CIP's near-term prospects for inclusion in the S&P/ASX200 index."
CIP fund manager Jesse Curtis highlights the facilities are 100 per cent leased to Arnott's, "an iconic Australian brand with the leading market position in the manufacture and supply of Australian biscuits".
"The assets contain significant "mission critical" infrastructure that is core to the tenants ongoing operations," says Curtis.
"Both assets feature long term, triple net leases with a combined WALE of 27.7 years and fixed annual reviews supporting CIP's future income streams."
The $154 million institutional placement will be at a 3.9 per cent discount to the previous closing price with settlement expected on 16 December.
The fund has also revalued nine of its existing 46 properties, leading to an increase of $19 million on prior valuations.
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