Manager strikes Tottenham industrial trade for $33m
Centuria has snapped up a warehouse in Melbourne’s west for its giant US partner.
Centuria Capital has added to its holdings in the last mile logistics sector by picking up an asset near the Port of Melbourne for its $500m mandate from US powerhouse Starwood Capital.
Starwood has been among the buyers in the hot logistics sector and has now bought a $33m industrial facility in the tightly held urban infill market of Tottenham, in Melbourne’s west.
The deal was the fifth off-market property secured for the Last Mile Logistics Partnership, with the portfolio expanding to about $200m. Starwood, co-founded by billionaire Barry Sternlicht, is one of the largest investors in the world and has a local presence.
The property at 1 Quarry Road comprises an 8016sq m warehouse on a four-hectare site, providing a low 20 per cent site coverage. The complex is occupied by Cargo Freight Services as a warehouse and container storage park. CFS maintains a lease on the property until 2030, with a current net passing income of $1.365m, equating to a passing yield of 4.16 per cent.
Centuria head of funds management Jesse Curtis said the low site coverage provided future development options and Centuria had a strong track record for executing value-add strategies.
“Significantly, the property is currently leased 65 per cent below comparable market rents and provides near-term rental reversion upside,” Mr Curtis said. “We are securing the asset at a 40 per cent discount to replacement cost.”
Centuria is one of the largest industrial landlords across Australasia with more than 160 assets about $6bn and it has a $1.2bndevelopment pipeline.
Centuria secured the Tottenham warehouse from a private vendor represented by Jones Real Estate’s Paul Jones. The result showsa capital gain of about $10m for the vendor within just two-and-a-half years of ownership, showing the resilience and strengthof Melbourne’s infill industrial market.
Jones Real Estate managing director Paul Jones said the result “reflects the enduring strength of the industrial sector andthe high demand for premium infill assets in proximity to major infrastructure”.
“We’ve worked closely with this client over a number of years and are proud to have delivered a significant uplift on theirinvestment in such a short time frame,“ he said.
The agent has brokered a series of industrial sales, including 75 Acacia Rd, Ferntree Gully for about $8.62m (4.68 per centyield), 453–455 Hammond Road, Dandenong South for $17.5m (4.63 per cent yield), 215-225 Heales Road, Corio for $15m (5.37per cent yield), and 2231 Melton Highway, Melton for $44m.
