Centuria Fund Spends $200m on NSW Office Assets


Fund manager Centuria has spent $119.1 million in acquiring two NSW metropolitan office assets for its Centuria Metropolitan REIT.

Centuria Metropolitan REIT acquired a 50 per cent interest in 201 Pacific Highway, St Leonards for $85.8 million, Centuria's unlisted arm purchased the balance of the property. The Centuria fund already owns part of the neighbouring 203 Pacific Highway property.

The second office purchase was 77 Market Street in Wollongong for $33.3 million at a 7.25 per cent yield.

The St Leonards property was purchased from Abacus Property and Goldman Sachs at a 6.6 per cent initial yield and the Wollongong building purchased from Medibank Private via a sale and leaseback deal on a 7.25 per cent initial yield.

Centuria is funding the deals through a combination of equity and debt and at the same time announced an entitlement offer to raise approximately $60 million.

[Related reading: North Shore Offices in High Demand]


201 Pacific Highway, St Leonards

[Related reading: Centuria Triples Investment in Spring Street Office]

The company said that a revision in independent valuations had also provided an uplift in property values for the Centuria Metropolitan REIT of $33.8 million taking the total value in office and industrial assets to $793.8 million at end of November.

Centuria Metropolitan REIT trust manager, Nicholas Blake said, “We see significant potential in St Leonards, with Sydney’s North Shore experiencing tightening vacancy rates, limited supply and strengthening rentals.

“St Leonards benefits from these strong fundamentals but has lagged the neighbouring North Sydney and Chatswood submarkets due to significant stock withdrawal for residential conversion. Accordingly, we expect this market to re-position as the residential development cycle abates.

“Our investment in the A Grade asset 201 Pacific Highway, St Leonards, which is adjacent to CMA’s existing asset at 203 Pacific Highway consolidates our footprint in this near CBD market. Both assets are well-located above the St Leonards rail station with significant in place amenity.

“Similarly, 77 Market Street Wollongong is a high-quality, fit-for-purpose building in a well-defined market, anchored by strong commercial tenants.”

The Centuria Metropolitan REIT capital raising was underwritten by Moelis and UBS.

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