AWH lease renewal locks cotton, wool in shed for another 7 years
Centuria Industrial REIT has renewed a lease with cotton and wool handling company AWH for 94,241 square metres across two sites in Perth’s southern suburbs, making for WA’s largest industrial leasing deal for the 2024 calendar year to date.
AWH, which has occupied the 310 Spearwood Avenue and Lot 14 Sudlow Road premises in Bibra Lake since 2012, had a further five-year option but chose to sign a seven-year deal for a new term beginning, August 1, 2025, Centuria’s WA asset manager for industrial and agriculture Amanda Swan said.
“Based on size and scale of the deal, it’s definitely a high market rent,” Ms Swan told The Australian Financial Review.
“What we’ve been seeing over the last three years is record level of take-up, low vacancy and the market in WA, specifically Perth industrial, seems to be firming.”
It is a significant contract. DP World Australia- and Nutrien Ag Solutions-owned AWH is CIP’s largest tenant by area and accounts for 4 per cent of the $1.93 billion market-cap REIT’s annual rental revenue.
Centuria Industrial REIT’s portfolio is 8 per cent weighted to WA, with nine assets worth about $350 million.
Centuria Industrial REIT also recently leased an 8800-square-metre warehouse at 204-208 Bannister Road, Canning Vale – also in Perth’s southern suburbs – to Chairay Sustainable Plastic, on a five-year term from August 1. The newly completed two-unit industrial facility has now achieved 100 per cent occupancy.
AWH, which operates out of 16 facilities in Australia, said there were few industrial sites in WA within proximity to road, sea ports, airports and rail transport nodes of the scale of the Bibra Lake facilities.
“We are the largest independent logistics services provider to the Australian wool and cotton industries, handling approximately 1 million bales of wool annually while also facilitating sale-room services for the three national wool-selling centres as part of our third-party logistics operations,” AWH chief executive Michael Potenza said.
Demand for industrial property of different types is still growing. Australia has 0.4 cubic metres of refrigerated warehouse capacity per urban resident, lagging the US at 0.6 cubic metres and the Netherlands at 0.9 cubic metres, meaning the booming population will require significant investment in new refrigerated warehouses, CBRE said last month.
Singapore-based Frasers Property Industrial in May said it would expand its $S6.2 billion ($6.8 billion) portfolio of Australian warehouses after acquiring several sites in NSW and Victoria and adding about 270,000sq m of new projects to its Australian pipeline.
