New Centuria listed property trust to take advantage of improving A-REIT conditions: CEO John McBain

Improving market sentiment, low interest rates and appealing yields were some of the factors that propelled Centuria to set up a listed property trust under the leadership of former Mirvac boss Nick Collishaw, says Centuria chief executive John McBain.

Collishaw was appointed to head up the new business division earlier this month and will begin with Centuria on May 1.

McBain says Centuria is currently working very hard sounding out institutional investors and has offers out in the market for a “few hundred million dollars of real estate” which will form the core of the new listed trust.

While it’s too early to say what the exact composition of the trust will be, McBain says it will be diversified to some extent but with a very clearly defined strategy.

“It won’t be a blancmange,” he tells Property Observer with a launch date pencilled in for later this year.

McBain says the ASX-listed business, which already has a $1 billion plus unlisted property funds arm led by Jason Huljich and an Asian wholesale investment division led by Chong Woon Pin in Singapore, was always looked at adding a third arm to its strategy - when the listed property trust sector became a good value proposition.

He says the availability of assets at appealing yields compared to interest rates, the recovery of net tangible asset values and the availability of equity for new transactions motivated Centuria to set up its A-REIT, led by Collishaw.

“We have raised $170 million this year and are one of the more active and larger property fund managers,” says McBain.

Its most recent syndicate investment, the 175 Castlereagh Street fund, closed over-subscribed with initial distributions starting at 9%.

Centuria Property Funds acquired the CBD office building for $56 million in January.

“We felt there was plenty of scope for other things. We have one of the larger property teams on eastern seaboard, and we rate them highly," says McBain.

“The general popularity of A-REITS has recovered and we believe there is space for one more in the sector.

“That’s not just my opinion, but the market opinion regarding the sector.

“We are taking advantage of the conditions, but then it’s down to property skills.”

McBain said getting Collishaw on board was a natural fit.

“He is a friend and someone we can work with. He was very easy to approach.”

“The listed property trust will be Nick’s show.”