The Centuria Industrial REIT (ASX: CIP) share price is in a trading halt today after the real estate investment trust (REIT) announced a $171 million cold storage portfolio acquisition.
The latest addition to Centuria's logistics portfolio follows a series of major acquisitions this year. They include the $417 million Telstra Data Centre in Victoria in August and the $167 million Visy Glass manufacturing facility in New Zealand in October.
With the new acquisition, Centuria's industrial portfolio now stands at 59 assets worth $2.3 billion. The company says the occupancy rate is 96.8% with a 9.7-year weighted average lease expiry (WALE).
What does Centuria do?
Centuria Industrial REIT is Australia's largest domestic pure play industrial REIT. Centuria's portfolio of quality industrial assets are located across Australia's major cities. The company's hands-on, active management style provides investors with regular dividend payments and the potential for capital growth.
Centuria Industrial REIT is part of the S&P/ASX 200 Index (ASX: XJO).
About the acquisition
In this morning's ASX announcement, Centuria reported it has acquired 3 cold storage assets worth $171 million, providing an average initial yield of 5.62%. The facilities – located in Victoria, New South Wales, and Queensland – are 100% occupied.
Centuria also revealed a $125 million fully underwritten institutional placement to partly fund the purchase.
Commenting on the acquisition, Centuria fund manager Jesse Curtis said:
The cold storage portfolio acquisition leverages a key growth focus for CIP to acquire assets supporting non-discretionary, food and pharmaceutical distribution and refrigerated logistics industries. These industries are experiencing strong tailwinds underpinned by a rapid increase in online food sales creating favourable supply and demand dynamics.
The three assets are strategically located within core industrial markets of Sydney, Melbourne and Brisbane, with excellent connectivity to distribution networks. They provide secure income streams supported by high-quality tenant customers.
Centuria funds management head Ross Lees added:
Throughout the 2020 calendar year, there has been a considerable consumer shift towards non-discretionary online retailing due to the impact of COVID-19. Adding to this is the unmet demand for cold storage facilities from the grocery and pharmaceutical sectors. These metrics have underpinned Centuria's rapid portfolio expansion within the industrial and logistics sector.
Within the past 12 months, Centuria's funds have acquired approximately $1.1 billion in industrial assets. It has been a resilient sector and one we believe will continue growing in the near future.
The Centuria share price is down 5% year-to-date and up 39% since the 24 March lows. It was priced at $3.15 prior to the trading halt.
