Centennial secures $31.2m Cleveland industrial site in oversubscribed capital raising
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Centennial Property Group has acquired a 5.6-hectare industrial and logistics facility in Cleveland, Brisbane for $31.2 million through an oversubscribed capital raising.
The Cleveland Industrial Park Trust, which raised approximately $20 million from wholesale and high net worth investors, closed oversubscribed in late August.
Nick Lidonnici, Centennial’s Head of Portfolio Management, said the acquisition presents strong return profiles.
“This acquisition presents strong return profiles and through an active asset management strategy targeting rental growth based on current and future market forecasts, together with upcoming rental expiries and market demand, we are very confident to be adding Cleveland Industrial Park to our growing asset base that’s now approaching $2.4 bn owned or under management,” Mr Lidonnici said.
The site, located 22km southeast of Brisbane’s CBD, is anchored by Harvey Norman and Barton Motors. It offers a gross lettable area of approximately 19,500 square metres and is currently under-rented by more than 20 percent.
Investors were attracted by the trust’s targeted internal rate of return of 14 to 15 percent per annum over a 5 to 7 year lifespan.
Mr Lidonnici noted the site’s low coverage of 39 percent offers potential for expansion.
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“The site lends itself to multiple value-add opportunities, including the potential to increase GLA by up to 3,600sq m through warehouse expansion,” he said.
Simon Beirne from Colliers and Michael Callow from CG Property, who jointly brokered the sale, praised Centennial’s acquisition.
“Centennial is widely recognised for its hands-on management and leasing capabilities and ability to turn around underperforming properties, particularly in the mid-space, urban I&L sector,” Mr Beirne said.
The Cleveland acquisition follows Centennial’s recent $35.5 million purchase of an industrial site in Tivoli, southwest of Brisbane. The company has two more acquisitions in the pipeline, with all three valued at approximately $100 million.
This latest acquisition brings Centennial’s total assets to 83, with over $2.4 billion under management.