Centuria picks up the last mile pace with $500m Starwood mandate
Centuria joint CEO Jason Huljich.
Centuria Capital will forge more deeply into the hot last mile logistics sector after picking up a $500m mandate from US powerhouse Starwood Capital.
The move will see the ASX-listed company step up its already large industrial operation and target warehouses e-commerce providers and traditional retailers pursuing online sales can use as distribution centres.
It also signals Starwood’s desire to increase exposure to one of the most active sectors of the property market as the big shift towards logistics accelerates.
Starwood, co-founded by billionaire Barry Sternlicht, is one of the largest investors in the world, but the local manager would not confirm the identity of the mandate client.
The US investment giant has been active in Australia and in 2021 teamed with Arrow Capital Partners to recapitalise a national portfolio of office and industrial assets held by Altis Property Partners worth more than $760m.
JLL head of international capital Australia and New Zealand, Kate Low, brokered the Centuria deal.
Centuria said only that the mandate was on behalf of a significant US private investment firm and would be known as Last Mile Logistics Partnership. It will focus on acquiring assets within supply-constrained infill industrial markets across Australia.
The partnership was seeded with a $76m three-asset portfolio of Melbourne industrial assets, which settled last week.
“Centuria has significant experience in securing high-quality industrial real estate across Australia, which is increasingly recognised by domestic and offshore institutional capital. Centuria’s institutional capital investments now total $2.2bn across the logistics, healthcare, daily needs retail and office property sectors,” Centuria joint CEO Jason Huljich said.
The industrial vacancy rate of less than 1 per cent is one of the lowest on a global scale, and supply constraints are driving exceptional rental growth, particularly in tightly held last-mile urban infill markets.
Big institutions are partnering with property managers to get access to the sector.
In June, The Australian revealed the heavyweight Funds SA had awarded a $350m mandate to the specialist fund run by HMC Capital. The manager wants to grow to $1bn worth of assets in the sector and is one of the nimble operators snapping up small sites and turning them into critical property assets. HMC’s fund got $350m from the SA institution and $50m from the listed HomeCo Daily Needs REIT. The commitments were billed as the first of a series of funds that it plans.
HMC is leveraging off its daily-needs real estate business in the area, and started with the Menai Marketplace in Sydney. Others are already active. Urban Logistics Co, backed by private equity real estate firm Wentworth Capital and US giant BlackRock Alternatives, is aiming for $2bn in the area.
Fund manager Hale Capital Partners is also on track to manage $4bn of assets, with a focus on last mile deal logistics. It has vehicles backed by Oxford Properties and Warburg Pincus, and has just launched a third venture.
Morgan Stanley analysts Simon Chan and Lauren A. Berry said the mandate was positive, as it fitted with Centuria’s capital-light business model.
