Arnotts in sale and Leaseback to Centuria Industrial10 December 2019
Centuria Industrial REIT has entered into agreements to acquire 2 industrial assets via a sale and leaseback with Arnott's, valued at $236.2m.
The two assets are located at 46 Robinson Rd E, Virginia QLD, and 23-41 Galway Avenue, Marleston, SA. Both assets have long term, triple net leases with a combined WALE of 27.7 years and fixed annual reviews.
The 7.2ha Virginia asset has a GLA of 44,785sqm with a 30 year lease and was acquired on a yield of 5.8%. The 4.1ha Marleston asset has a GLA of 23,593sqm with a 12 years lease and was acquired on an initial yield of 7.4%.
The acquisitions will be partially funded by a $154.4 million placement and $103.1 million of new and existing debt facilities. The fully underwritten institutional placement is issued at $3.41 per unit which represents;
- -3.9% discount to the last close price of $3.55 on 10 December 2019
- -5.8% FY20 FFO yield
- 5.5% FY20 distribution yield
In anticipation of the capital raising, CIP has independently revalued 9 of its existing 46 properties as at 31 December 2019, resulting in an increase of $19.0 million, or 9.5% on prior valuations. The revaluations reveal firming of the capitalisation rate of by 36 bps.
CIP Fund Manager, Mr Jesse Curtis commented: "CIP's portfolio metrics will be significantly strengthened, with the Acquisitions increasing the portfolio WALE
from 4.4 years to 7.2 years and introducing a new national tenant customer to the REIT. The acquisitions are consistent with CIP's focus on identifying quality real estate located within infill markets with close proximity to major infrastructure."
"The acquisitions are 100% 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. 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."