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Sydney-based funds manager Centennial has lifted its already solid weighting in the Queensland market with the $13.1 million acquisition of an industrial property at Bulimba in Brisbane’s inner east.
The acquisition of the property, located at 59 Taylor Street, follows a $31.2 million deal for the 5.6ha Cleveland Industrial Park in the city’s bayside area at the end of August.
The Bulimba property has been sold by signage manufacturer Albert Smith Signs, which has a 151-year history in Queensland. The fourth-generation business was founded in 1873 by Samuel Smith as rubber stamp manufacturer Smith & Sons Pty Ltd in Brisbane’s CBD.
The Bulimba site comprises a land area of 9,264sqm with two industrial buildings totalling 4,936sqm of gross lettable area.
Albert Smith Signs has sold the property on a two-year leaseback with a further one-year option, giving Centennial an initial passing yield of 5.35 per cent on the transaction.
Centennial's head of property funds David Cupit describes the industrial property as an “attractive investment given its strong de-risked cash flows”.
“The asset will be added to Centennial's Enhanced Value Partnership fund, established with joint-venture partner Brookfield in mid-2023,” he says.
"The site is zoned General Industry A, offering multiple tenant usages from services to low-impact industrial.
"We will draw from our strengths operating in the mid-space industrial and logistics sector to maximise site utilisation and rental returns."
The acquisition builds on Centennial’s interest in last-mile logistics sites located in infill areas where properties are tightly held and constrained by supply.
Due to Bulimba’s inner-city location, large-scale industrial land is scarce in the suburb with rents at a premium due to its connectivity to major arterial roads and proximity to port and air freight hubs.
"While the rate of rental growth has slowed recently from historical highs, limited availability of stock and land within Bulimba and the southern TradeCoast more broadly will continue to provide upward pressure on rents and above trend rental growth,” says Cupit.
"Land in Bulimba is extremely rare, which is especially the case for industrial parcels.
"Underscoring the site's excellent development upside is Bulimba's emergence as one of Brisbane's top 10 suburbs for median house price, which is currently sitting at $1.88 million.
“The site is also under 200 metres from the Bulimba Barracks mixed-use residential redevelopment that will add a further 800 new dwellings to the area."
The off-market deal for 59 Taylor Street was brokered by Modus Property Group's David Gibson and Nick Bandiera.
Modus Group's partner David Gibson says the site drew “spirited interest from multiple parties”.
"Securing this site is a generational opportunity," says Gibson.
"It possesses all the hallmarks of a sought-after asset and given its range of functional improvements, significant positive reversion opportunities and future development upside, the asset was strongly contested. We are delighted to see the site changing ownership and into the very capable hands of Centennial."
Apart from its latest industrial acquisitions in Brisbane, Centennial says it is stepping up construction on the second stage of its 9,010sqm Geebung Industrial Park in Brisbane's inner-north following strong leasing pre-commitments.
Centennial further strengthened its Queensland commercial portfolio earlier this year by acquiring Hinkler Central shopping centre, the largest retail centre in Bundaberg, for $107 million in partnership with Parkstone Funds Management.
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