“The acquisition of $1.5 billion of industrial assets across its platform typifies its strategy for expansion,” he said.
“This is the first major acquisition using the APN platform [which it only recently purchased]. We will be interested to see how Dexus leverages other APN vehicles to expand its third party capital empire.”
Centuria Industrial REIT, the country’s largest listed pure-play industrial fund, has expanded its base with a portfolio of eight key urban-infill industrial properties in Sydney, Melbourne, Brisbane and Perth for a collective $351 million, on a blended initial yield of 4.1 per cent.
The assets are anchored by a $200.2 million “super-prime” distribution centre, located at 56-88 Lisbon Street, Fairfield in Sydney’s west, which was secured on a 3.6 per cent initial yield. It is leased to the retailer Fantastic Furniture.
It is one of the largest industrial facilities within Sydney’s infill markets and one of only 10 large-scale distribution centres within the M2, M7 and M5 orbital road network.
The remaining seven assets, worth $151.1 million, are spread across NSW, Victoria, Queensland and Western Australia. All are diversified across distribution, cold storage and transport. The deals were undertaken with Colliers agents.
Centuria Industrial REIT (CIP) is an ASX-listed fund with a market value of $2.21 billion. Completion of the acquisitions will expand its portfolio to 75 properties, worth $3.5 billion.
It will partially fund the purchase with a $300 million fully underwritten institutional placement and non-underwritten unit purchase plan. The book-build process will have a floor price of $3.80, a 5.2 per cent discount to the last traded price of $4.01.
Jesse Curtis, Centuria’s head of industrial and the REIT’s fund manager, said these acquisitions are aligned with CIP’s portfolio strategy to acquire high-quality assets in urban infill locations where accelerating tenant demand is driven by e-commerce and last-mile users.
“The transactions further demonstrate our capability of sourcing off-market opportunities and curating a high-quality portfolio of industrial and logistics assets that have favourable pricing and superior quality to recent portfolio transactions in the market,” he said.
Jarden analyst Andy MacFarlane said that while the Centuria transactions appear “muted from an earnings perspective and is dilutionary to net tangible assets on a pro forma basis” they see the strategic merit, with the portfolio 67 per cent weighted to NSW.
“Overall we make no change to our overweight rating, and we believe sector tailwinds will continue to support industrial valuations,” the analysts said.