Centuria Industrial REIT has continued to grow its book as demand for industrial & logistics assets continues to grow despite the pandemic.
Jesse Curtis, CIP Fund Manager, said “We have generated strong momentum through the first quarter of FY21 with $523m of quality, fit-for-purpose industrial asset acquisitions. The expanded portfolio, totalling $2.1 billion, now provides a broader exposure to industrial sub-sectors of data centres and cold storage assets. We will continue to pursue acquisition opportunities that complement CIP’s strategy.”
The Group re-affirmed its FFO guidance of 17.4 cents per unit (cpu) and distribution guidance of 17.0 cpu.
During the period, the Group acquired six high-quality industrial assets for $523m, including;
• The Telstra Data Centre, Clayton, VIC for $416.7m secured with a 30-year triple net lease on sale and leaseback terms to Telstra
• $43m modern cold storage facility at 1 Lahrs Road, Ormeau, QLD with 100% occupancy and 6.5 year WALE to Markwell Cold Storage, and
• Four fit-for-purpose industrial assets for $63m with 100% occupancy, average WALE of 7.3 years and initial yield of 6.0%.
Throughout Q1 FY21, terms were agreed or leases completed for more than 45,318sqm, representing approximately 4.5% of the portfolio GLA. The majority of the deals during the quarter were renewals. The portfolio remains in a strong position with just 4.4% of leases expiring during the remainder of FY21, of which 1.8% is due to expire in Q4.
Portfolio occupancy remains high at 96.5% with a substantial WALE of 10.0 years. During the quarter, a commercial agreement was reached with GM Holden Ltd (GMH) to surrender their Lease at 14-17 Dansu Court, Hallam VIC. While occupancy is reduced, the agreement provides a surrender payment. The original GMH lease was due to expire in November 2022. Currently, this space is being actively marketed for lease to maximise the benefit of the surrender payment.
Occupancy was also affected by a lease deal at 46 Gosport Street, Hemmant QLD not proceeding. However, strong enquiries remain for the space.
Jesse Curtis commented, “Our active management approach to the portfolio has further de-risked our expiry profile with no more than 11% expiring in one year over the next three years. Portfolio leasing momentum has continued at preCOVID leasing levels and has provided the opportunity to benefit from this through the surrender payment received at our Hallam asset.”