A Morgan Stanley Real Estate Investing-sponsored investment vehicle has acquired a 50% interest in eight industrial assets across the country for $180.9 million via a new partnership with ASX-listed Centuria Industrial REIT.
Under the deal, the new Centuria Prime Logistics Partnership (CPLP) will own a roughly 50% stake in eight of the REIT’s assets, reflecting a divestment yield of 4.7%.
The deal includes three properties in Sydney’s Bella Vista, Glendenning and Erskine Park; three properties in Melbourne’s Dandenong South, Epping and Derrimut; and two warehouses in Ipswich, Queensland.
Centuria said the properties had recently benefitted from value-add strategies and were underpinned by strong tenant covenants.
Jesse Curtis (pictured), CIP Fund Manager and Centuria Head of Industrial, said the partnership demonstrated the resilience of CIP’s portfolio and the continued demand for high quality industrial assets within urban infill markets.
“Establishment of this partnership, along with other recently completed divestments, demonstrates CIP’s ongoing commitment to prudent capital management and portfolio optimisation,” Curtis said.
95-105 South Gippsland Hwy, Dandenong South, Melbourne
Centuria Joint CEO Jason Huljich said the new partnership expanded their existing relationship with MSREI, having established the pure-play healthcare real estate vehicle, Centuria Prime Partnership, in May 2022.
“Our access to diverse property sectors continues to present opportunities for us to increase the institutional capital that is seeking to partner with Centuria,” Huljich said.
Centuria entities will be appointed as the partnership’s Trust Administrator, Property Manager and Development Manager.
The deal was expected to settle this month, with CBRE acting on behalf of CIP.
This transaction built on the divestment of 30 Clay Place, Eastern Creek NSW for $34.5 million with CIP having recycled $215.4 million worth of assets this financial year.
Earlier this month, the REIT started building a new industrial facility in Canning Vale in Perth to take advantage of the city’s low vacancy rates, limited forecast supply and rising industrial rents.
In November, Centuria tapped into the regional industrial market with the acquisition of a $35.5 million distribution centre in Mackay, Queensland, reflecting a 7.24% equivalent market yield.
It comes as Australia’s warehouse market was expected to need an additional 1,800,000 sqm of industrial and logistics space over the next five years to accommodate the forecast growth of online shopping, according to CBRE.
CBRE found that online sales rose from representing 9% of total retail spending in 2019 to 14.3% in July 2022, and were forecast to reach 17% by 2026.
