Centuria funds hits $5.1b as investor cash pours into industrial assets
Centuria Capital Group has surpassed the $5.1 billion level of asset ownership in the booming industrial property sector at a time when investors from overseas are competing to establish a presence in the Australian market.
Following its recent portfolio purchase which included a $200.2 million distribution centre in Fairfield, the group’s industrial portfolio is spread across its ASX and NZX-listed funds and Australia and New Zealand unlisted funds.
The rise of online shopping has led to a sharp jump in demand for warehouse storage and distribution facilities.
Ross Lees, Centuria head of funds management, said Centuria had been executing a targeted and differentiated growth strategy specifically on metropolitan infill sites catered to the last-mile logistics sector.
“We could see larger international markets such as Britain, Europe and the US showing the highest occupier demand in these types of locations,” Mr Lees said.
“Naturally this also had a flow-on effect with capitalisation rate compression and stronger rental returns within these specific markets due to limited land availability and high ecommerce-related occupier demand.
Gavin Bishop, Collier head of industrial, who advised Centuria Industrial REIT on the 56-88 Lisbon Street site in Fairfield, said the landmark sale represented the largest standalone industrial and logistics asset to transact within Australia for 2021.
He said it had set a new benchmark for pricing, achieving an initial yield of 3.60 per cent, proving a genuine premium for the larger assets. The 60,223 square metre centre is one of the largest industrial facilities within Sydney’s infill markets.
“Excluding portfolio sales, in 2021, there have been six standalone assets to trade above $100 million, totalling almost $800 million. With portfolios transacted above $100 million included, this jumps to nearly $7.8 billion,” Mr Bishop said.
Jason Huljich, Centuria joint chief executive, said the $5.1 billion milestone was a significant achievement for the group.
“It reaffirms our corporate strategy to invest into new asset classes through corporate acquisitions, then using the group’s strong balance sheet and distribution capability further bolster market dominance within these specific sectors,” Mr Huljich said.
The deal comes as offshore buyers have been buying Australia’s office and industrial, with close to $16 billion invested over 2021, according to sales data to the end of September 2021.
m3property national research specialist Casey Robinson said offshore buyers had been predominantly active in the industrial sector, investing $7.53 billion this year, boosted by the acquisition of Blackstone’s Milestone portfolio by Singaporean ESR and GIC.
“Industrial property sales this year have grown by 11.85 per cent on last calendar year’s total,” she said.
Ms Robinson added that offshore buyers had already shelled out $7 billion for prized office trophies, increasing their investment by more than 20 per cent on the previous calendar year.
“The Australian property markets have always been keenly sought after by foreign investors and this appetite shows no sign of starving itself,” she said.
