A month after reining back its forecast earnings for the coming year, publicly listed property fund manager, Centuria Capital Group (ASX: CNI) revealed that it has secured a new $500 million institutional investment mandate on behalf of a significant, albeit undisclosed US private investment firm.

Known as Last Mile Logistics Partnership (LMLP), the mandate – the second industrial institutional capital partnership secured by the group in the last 12 months – will focus on acquiring assets within supply-constrained infill industrial markets (logistics real estate) across Australia.

Today’s announcement follows a joint venture with MA Financial in September 2022, which secured one of Perth’s best known office towers, Allendale Square.

Three months later, the group entered into a partnership with Morgan Stanley, known as the Centuria Prime Logistics Partnership (CPLP), with the MSREI vehicle acquiring around a 50% interest in eight CIP-owned Prime-Grade industrial assets.

What’s arguably attracting institutional mandates of this magnitude is Australia’s industrial vacancy rate, which based on Colliers research from the last quarter of 2022, was less than 1% (0.6%) – making it one of the lowest on a global scale.

By comparison, industrial vacancy rates in Los Angeles, New York, London and Hong Kong are 2.0%, 2.8%, 5.0% and 3.3% respectively.

These supply constraints bode well for rental growth, particularly within tightly held last-mile urban infill markets.

All assets were transacted off-market and settled on 8 September 2023 and Centuria’s institutional capital investments now total $2.2 billion across the logistics, healthcare, daily needs retail and office property sectors.

Commenting on today’s announcement, Jason Huljich, Centuria’s Joint CEO notes the new LMLP mandate adds to Centuria’s deep distribution network as it continues to secure further capital sources across the group.

It’s understood the LMLP is seeded with a $76 million three-asset portfolio, with the properties located within key urban Melbourne industrial precincts.

“Centuria has significant experience in securing high-quality industrial real estate across Australia, which is increasingly recognised by domestic and offshore institutional capital,” he said.

Centuria’s $6 billion industrial platform consists of around 160 properties across Australia and New Zealand, which are highly concentrated in infill logistics markets.