Leading Australasian real estate manager, Centuria Capital Group, continues to capitalise on the strong industrial market tailwinds with the acquisition of a $35.5million, high-quality distribution centre at 69-79 Diesel Drive, Paget, Mackay QLD.
The acquisition, which was secured on a 7.24% equivalent market yield, will be the underlying property for Centuria’s new single-asset, closed-ended unlisted real estate fund, Centuria Industrial Income Fund No. 2 (CIIF2 or “Fund”).
The purpose-built, 13,843sqm industrial facility is 100% leased to Wesfarmers’ safety supplies subsidiary, Blackwoods, on a 6.1-year WALE with annual CPI-linked rent reviews. The vendor, Garda Property Group took 9.4% discount to its book value to complete the transaction.
Jason Huljich, Centuria Joint CEO said, “This Central Queensland acquisition captures the strong tailwinds of the domestic industrial market while harnessing the sector’s robust rental growth, driven by low vacancy rates and constrained supply. Furthermore, Mackay is strategically positioned to service a significant North Queensland catchment area including Cairns, Townsville and Mount Isa.
“Centuria continues to seek out strategically located, fit-for-purpose industrial assets that are underpinned by quality tenants on favourable leasing covenants. The Mackay property ticks all these boxes while also providing a value-add development opportunity, which could potentially extract further returns for our investors.”
The asset has a low (46%) site coverage providing potential expansion opportunities.
The property benefits from dual road frontage and a near level topography. It comprises a high-quality distribution centre including showroom, office and warehousing with 11-13-metre clearance, full height racking system, mezzanine floor, pick and pack floor area, dispatch and receipt areas each via nine roller doors with awning cover. A small manufacturing facility on land to the rear is subleased to another Wesfarmers subsidiary, Coregas.
Paget is the main industrial and distribution centre for the Mackay region being in proximity to the Mackay Airport, the Mackay rail intermodal terminal, Port of Mackay, and the Bruce Highway, which connects North Queensland to Southeast Queensland.
CIIF2 will provide an initial five-year term, monthly distributions and has a forecast starting distribution yield of 6.50% pa in FY23, rising to 6.75% paii in FY24. It has a minimum entry investment of $50,000. Centuria will seek to raise $22.4 million to launch the Fund. Applications for units in CIIF2 must be made pursuant to a PDS which is available on Centuria’s website at https://centuria.com.au/ciif2.
“Centuria benefits from approximately two-thirds of its platform being weighted towards unlisted real estate funds. The unique composition appeals to various capital sources and can accommodate a range of properties across the asset classes we are presently focused on growing within. We continue to see attractive themes within the industrial sector and are pleased to be delivering this new investment opportunity for our unlisted investors,” Mr Huljich concluded.
In March 2021, Centuria completed the Centuria Industrial Income Fund No.1 (CIIF1), raising $40million for the acquisition of four assets, collectively worth $89million as at 30 June 2022.
The Paget acquisition follows Centuria’s recent 50% investment in the $223million Allendale Square office building in Perth, c.$169million invested across five loan facilities by Centuria Bass Credit, and c.$42million worth of acquisitions by the Centuria Healthcare Property Fund (CHPF).
Colliers International’s Simon Beirne acted on behalf of the Paget vendor.
Related Articles
