Centuria REIT buys three office assets in Perth and Melbourne for $150 million

Staff ReporterJuly 12, 20170 min read

Centuria Property Funds said its listed office fund, Centuria Metropolitan REIT (ASX: CMA), has bought three commercial properties in Perth and Melbourne for a total of $150 million. 

In Perth, Centuria acquired two new commercial assets: The Hatch Building at 144 Sterling Street (above), and 42-46 Colin Street, for a total of $91.8 million. The deals marked the fund manager’s first foray into the Perth office market.

Late in June, Centuria acquired the new Target headquarters at Williams Landing in Melbourne’s western suburbs. Together with the Perth deals, the total value was $150 million and will increase Centuria Capital Group’s (ASX: CNI) entire funds under management to $4.15 billion, it said in a media release.

Earlier this year, Centuria Property Funds sold its commercial office tower in Brisbane’s Spring Hill for $38.7 million to Sentinel Property Group.

“Centuria’s approach is to pay the fee and to take over the management from the agent, freeing them up to work on the next property, which enables us to generate income returns alongside the potential for capital growth,” said CMA trust manager Nicholas Blake.

The two Perth properties are fully 100% leased, with the major occupiers being WA Police, Insurance Australia Group Ltd, and consulting firm Hatch. 

“This diverse range of high-quality tenants, from government-owned and listed companies to international firms, means shareholders can feel confident in securing attractive and stable yield,” added Blake.

The combined WALE of the three properties is 6.5 years and their fixed rental reviews sit between 3.25% and 3.75%, Centuria said.

The acquisitions were partially funded by an equity raising of $90 million.

The acquisitions will help REIT’s property portfolio to increase in value by 25% to $760 million. 

It will see the trust’s market capitalisation increase from approximately $430 million to more than $520 million, improving its potential for S&P/ASX300 index inclusion (based on securities prices at 12 July 2017). 

CMA is also doing the due diligence on a development site in South West Sydney for the construction of an A-Grade commercial office building expected to be valued at around $75 million, it said. 

On the Perth acquisitions, Blake said the metro market was beginning to show excellent fundamentals, while AREITs in general are proving attractive to risk-averse investors.

“At CMA, we believe a truly quality property can provide unitholders with returns and yields over time in any market.” 

 

Staff Reporter

Tags:
Reits
Commercial Property
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