Centuria boosts Melbourne industrial portfolio by $37m

Centuria boosts Melbourne industrial portfolio by $37m

Centuria Industrial REIT (ASX: CIP) has made its first acquisition for 2021, forking out $37.25 million for two significant industrial holdings at Derrimut in Melbourne's west.

The properties, with a combined net lettable area of 31,466sqm, are occupied by Volkswagen Group and Tasman Logistics with the deal struck at an average initial yield of 5.1 per cent.

"The two Derrimut acquisitions were off-market opportunities that expand the trust's critical mass, now totalling five stabilised assets within this well-established industrial market," says CIP fund manager Jesse Curtis.

"The properties are underpinned by strong tenant covenants with well-known national and international customers contributing to CIP's reliable income streams."

The Volkswagen building, at 179 Studley Court, houses the auto giant's genuine parts centre and comprises 9,536sqm of warehousing and 400sqm of office space on a 2.2ha site. It has a weighted average lease expiry (WALE) of 4.2 years.

The property leased to Tasman Logistics, a freight service operator that moves up to 40,000 containers a year, has a WALE of five years. The 2.8ha site at 513 Mount Derrimut Road is occupited by a 12,000sqm warehouse and 601sqm of office space.

"Both assets provide low site cover within an in-demand precinct providing the opportunity to deploy our active management approach to build on CIP's already high-quality portfolio," says Curtis.

"As Australia's largest ASX-listed pure-play industrial fund, these acquisitions continue to demonstrate CIP's ability to identify relative value for high quality industrial assets in a highly competitive environment."

The acquisitions, which have been acquired by Centuria Property Funds No.2, not only lift CIP's exposure to the Derrimut industrial corridor, they increase the investment group's portfolio weighting in Victoria by 1 per cent to 38 per cent.

The properties, both developed in 2008, will be funded using existing debt facilities.

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