ASX-listed Centuria Industrial REIT (CIP) has acquired a portfolio of six urban industrial assets located across Melbourne, Sydney and Brisbane worth a combined end-value of $132.4 million.
The REIT said the deal grew its total portfolio to about $4 billion and capitalised on land-constrained, urban infill markets that were in demand from e-commerce operators.
On the newly acquired asset in the Melbourne suburb of Campbellfield, the REIT plans to build a new 44,000 sqm industrial estate once its short lease expires.
The REIT acquired the Campbellfield property for $37.7 million and will partner with Cadence Property Group to develop it into a five-unit industrial estate worth an estimated $104.1 million.
CIP Fund Manager and Centuria’s Head of Industrial Jesse Curtis said the north Melbourne industrial market had vacancy of less than 2% and was attracting strong interest from high-quality tenant customers.
“One of CIP’s strategic focuses is to provide its investors with exposure to urban infill industrial locations that cater to last-mile, e-commerce operators,” said Curtis.
“The urban infill locations of these eastern seaboard acquisitions provide a favourable leasing outlook for rental growth, underpinned by near-zero vacancy, buoyant tenant demand and limited land supply. These conditions provide opportunities to extract outsized returns from the assets.”
The Campbellfield project comes after CIP partnered with Cadence Property Group on the $89 million Southside Industrial Estate in Dandenong, which is currently under development.
“Our experience to date, in other infill markets, is that there is a real lack of modern logistics accommodation, and that the product is well sought after by tenants wanting to remain in infill locations,” said Cadence Property Group Managing Director Charlie Buxton.
“We expect this development to target a similar demand profile.”
The Campbellfield project, which is scheduled for completion in 2024, will target a Green Building Council of Australia Five-Star Green Star rating.
The other portfolio acquisitions include sites in Derrimut, Port Melbourne and Wetherill Park, which adjoin existing assets, in addition to properties in Acacia Ridge and Clayton South.
CBRE’s Jason Edge and Rory Hilton were the agents for the Campbellfield transaction; Jack Pershouse and Jason Edge facilitated the Wetherill Park transaction; and Stephen Adgemis, David Aiello and Ben Hegerty facilitated the Clayton South transaction.
Colliers International’s Jack Kelliher was the agent for the Port Melbourne transaction.
The deal follows the REIT’s purchase of a portfolio of four industrial properties across Sydney, Melbourne and Brisbane for $129.4 million in November last year.
Other recent industrial deals include Stockland’s acquisition of two logistics sites in Sydney’s southwest for $128.5 million and LBP Developments’ sale of a prime industrial development site in Revesby to a private developer for $16.3 million.
There have also been some significant industrial portfolio deals such as Blackstone’s purchase of GIC’s 49% stake in the Dexus Australian Logistics Trust for about $2.1 billion last month and Blackstone’s $3.76 billion Milestone industrial portfolio sale last year.