Centuria Banks On Storage and Data Centres in Spending Spree

Centuria Capital Group has added nine properties worth $694 million to its industrial listed properties trust portfolio and increased its value by 50 per cent in a strong first half of the financial year.

Fund manager for the Sydney-based ASX-listed Centuria Industrial REIT (CIP) Jesse Curtis said the group had been investing in “undersupplied industrial subsectors” including data centres in Victoria and cold storage facilities along the eastern seaboard.

“During the Covid period we observed a rapid increase in demand for data warehousing with a shift to cloud based data storage coupled with an increase in online shopping, particularly for non-discretionary items such as groceries and pharmaceuticals,” he said.

“We believe these trends are here to stay and investing in the undersupplied industrial sub-sectors of data centre and cold storage is a sound strategy.

“These sub-sectors complement the other sub-sectors that CIP provides exposure to including manufacturing, distribution centre and transport and logistics.”

Curtis said the acquisitions were strategically targeted within tightly held industrial sub-sectors with “favourable supply demand dynamics” to build a diversified pure-play industrial portfolio.

“In particular, we expanded into the data centre and cold storage sectors, with the acquisition of the $416.7million Telstra Data Centre in Clayton, as well as four cold storage facilities, worth $214.1million, within key infill markets along the eastern seaboard,” Curtis said.

Complementing the property transactions was a significant period of leasing for the trust with more than 140,000sq m leased across 14 deals, representing 13 per cent of the portfolio’s gross leasable area.

Leasing activity also resulted in tenant retention of 81 per cent, according to Curtis.

CIP’s portfolio comprises 117 diverse, high-quality tenant customers skewed to customers directly linked to the production, packaging and distribution of consumer staples, pharmaceuticals and telecommunications, which Curtis said provided a reliable income stream.

Curtis said the significant acquisitions and leasing activity, coupled with inclusion in the S&P/ASX 200 had increased investor relevance.