Centuria Adds $700m in Healthcare, Industrial Assets

Centuria Capital Group has acquired $700 million in real estate, with a focus on healthcare and industrial assets to push through Covid-19 headwinds.

Centuria Industrial REIT has acquired two industrial facilities worth $32.5 million including a Beacon Lighting distribution facility in Melbourne and Breezway Australia’s state headquarters in Brisbane.

The two assets have 100 per cent occupancy, an average weighted lease expiry of eight years and will become part of the entity Centuria Property Funds No.2 Limited.

These transactions add to the three-asset portfolio acquisition by the ASX-listed REIT announced in early August, anchored by the $416.7m Telstra Data Centre.

The group is also expanding its healthcare portfolio starting an un-listed property fund with six seed and pipeline assets worth $133 million including Bloomfield Medical in Orange and Vermont Private Hospital both in New South Wales.

Contracts have been exchanged on a medical centre at 120-122 Spencer Street in South Bunbury, WA and a development at 1613 Anzac Avenue in Murrumba Downs, Queensland were included in the new fund which has 100 per cent occupancy, 6.7 years of weighted lease expiry and a starting distribution yield of 5.75 per cent.

Centuria healthcare managing director Andrew Hemming said they were focusing on assets which had remained resilient through the current Covid period, underpinned by constant demand.

“The strong performance of this asset class, coupled with its relatively low volatility compared to other property asset classes, has driven significant investor demand,” Hemming said.

“We intentionally selected these assets, not only because of their strong property attributes, but they are tenanted by trusted, well-performing healthcare operators with strong covenants.”

Beacon Lighting’s purpose-built distribution facility was secured for $20 million under a triple-net lease structure, representing an initial yield of 5.5 per cent.

The facility in Derrimut, Victoria is situated within West Melbourne’s Gilbertson Industrial Estate comprising of an 11,469sq m warehouse and office facility on a two hectare site.

Breezway Australia’s Queensland head office and manufacturing facility was purchased for $12.5 million with an initial yield of 6.7 per cent.

Related: Centuria Goes Unconditional on Augusta Takeover

The louvre window manufacturing facility located in Coorparoo is 3.3km from the CBD in a key in-fill market, close to rail and major road arterials.

The 9,000sq m site provides potential for value-add development over the medium to long-term, leveraging its suitability for last-mile users according to Centuria.

Centuria fund manager Jesse Curtis said the acquisition builds on the strategy to acquire fit-for-purpose, high-quality industrial assets in key in-fill locations throughout Australia.

“We have commenced 2021 financial year strongly with quality acquisitions that complement CIP’s portfolio, provide strong income streams and support opportunities to undertake active management initiatives across our asset base,” Curtis said.

“We remain focused on increasing quality, scale and investor relevance as Australia’s largest domestic pure play industrial REIT.”

These acquisitions adds to $165 million in transactions in the industrial sector by EG, Charter Hall and Cromwell earlier in the week.