Centuria buys $11m industrial asset

A Centuria Capital fund has bought an industrial facility in Malaga for $10.8 million at a record initial yield of 5 per cent, demonstrating the strong demand for industrial property in Western Australia.

The 4,912 square metre facility on a 1.51-hectare site at 431 Victoria Road was purchased via Centuria’s unlisted closed-ended fund Centuria Industrial Income Fund No.1.

V10 Property Pty Ltd sold the asset, which is run by the directors of Perth real estate advisory SVN.

The asset is fully leased to Laing O’Rourke subsidiary Select Plant Hire, on a seven-year term.

JLL’s Ross Palframan and Nick Goodridge brokered the off-market deal, which set a new record yield for the industrial precinct.

Mr Palframan said the asset provided a long-term income stream secured by a strong leasing covenant, as well as future development potential.

“The site is a strategic landholding within close proximity to key residential catchments, allowing [Cenuria] significant future value-add opportunity,” he said.

“This transaction emphasises the yield compression that has continued into 2022 off the back off a buoyant 2021 investment market and reinforces the continued nationwide appetite for institutional investment into the WA logistics and industrial sector.”

Mr Goodridge added that WA’s local industrial market had benefited from significant and diverse demand as its economy stood out nationally “supporting unmatched levels of liquidity across the investment landscape.”

Centuria’s head of funds management Ross Lees said the unlisted fund initially launched 12 months ago, with three assets across Queensland and South Australia.

“Due to the industrial sector’s strong tailwinds providing robust revaluations, coupled with the fund’s debt headroom, we acquired the Malaga industrial facility to deliver value to our investors through an enhanced portfolio by providing greater diversification and scale,” he said.

The recent acquisition brings Centuria Industrial Income Fund No.1’s assets to four industrial properties valued at $88.1 million, with a 7.8-year weighted average leased expiry and 100 per cent occupancy.