Centuria Metro Office Long on Canberra

9 December 2019

Centuria Metropolitan REIT has entered an agreement to acquire the industry award winning Nishi building at 2 Phillip Law Street, Canberra for $256 million.


The building, which has a NLA of 27,411sqm, and WALE of 7.9 years, traded at a cap rate of 5.1%


Strategically located in the vibrant and gentrified NewActon Precinct, the A-Grade building expands CMA's portfolio value to $2.1 billion. The acquisition enhances the portfolio's WALE and occupancy and increases CMA's exposure to Australia's major office markets, reiterating its position as Australia's largest pure play office REIT.


Fund Manager, Grant Nichol's commented "CMA continues to develop its portfolio by introducing newly built, institutional grade assets that support the needs of employees and our tenant customers. Nishi provides excellent amenity for the NewActon and Civic precincts while the large floorplates create an efficient design that can accommodate a range of government or corporate tenants."


The building was completed in 2012, and has been highly recognised with several industry awards, including "Best International Project of the Year" by the Building Awards in London.


The acquisition continues to strengthen the quality of CMA's income streams, underpinned by leases to Federal Government tenants covering 54% of rental income, and structured rental growth with fixed rental reviews averaging 3.34% per annum. With the acquisition, CMA's total portfolio value expands to $2.1 billion, and the WALE increases from 4.8 years to 5.1 years.


To fund the acquisition, Centuria has undertaken a fully underwritten placement of $185m at a price $3, which represented a -4.8% discount to Centuria's $3.15 last close. Moelis Australia and UBS were lead managers and underwriters on the placement.