Centuria REITs strike US$340m in Australian office, logistics deals

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Centuria Metropolitan REIT has agreed to buy a Canberra office building for A$256m (US$177m) this week, as Centuria Industrial REIT purchased two logistics assets in Brisbane and Adelaide for A$236.2m (US$163m).

The NewActon Nishi building (source: Centuria)

Centuria Metropolitan REIT (CMA) purchased the 27,411 sq.m. NewActon Nishi building in the country’s capital city at a 5.1% cap rate, Centuria announced.

Completed in 2012, the grade-A office asset is 99.5% occupied with a weighted average lease expiry of 7.9 years.

“NewActon Nishi building is a high quality A-grade commercial office asset, leased predominantly to the federal government and strategically located in NewActon, a vibrant and gentrifying precinct within Civic, Canberra,” said CMA fund manager Grant Nichols.

“The acquisition continues to strengthen the quality of CMA’s income streams, underpinned by leases to federal government tenants covering 54% of rental income, and structured rental growth with fixed rental reviews averaging 3.34% per annum.”

During the same week, Centuria Industrial REIT (CIP) acquired two fully-let industrial assets via a sale and leaseback deal with Australian biscuit maker Arnott’s.

The deal included the 44,785 sq.m. warehouse at 46 Robinson Rd East, Virginia in Brisbane, which was purchased for A$211.8m, reflecting a 5% cap rate.

CIP also picked up the 23,593 sq.m. property at 23-41 Galway Ave, Marleston in Adelaide for A$24.4m at a cap rate of 7.25%.

“The assets contain significant ‘mission critical’ infrastructure that is core to the tenants ongoing operations,” said CIP fund manager Jesse Curtis.

“Both assets feature long term, triple net leases with a combined WALE of 27.7 years and fixed annual reviews supporting CIP’s future income streams.”

To help fund the deals, CMA and CIP announced fully underwritten institutional placements to raise A$185m and A$154m, respectively.

The newly-acquired assets will expand CMA’s portfolio value to over A$2.1bn, while growing CIP’s portfolio to more than A$1.5bn.

The two REITs are managed by Australian-listed investment manager Centuria Capital, which has A$7bn in assets under management.