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The Centuria (ASX:CIP) share price climbs on acquisition news

changing asx share price from acqusition represented by man reaching out to touch acquisition sign
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The Centuria Industrial REIT (ASX: CIP) share price is up 2.65% at $3.10 in midday trading, outpacing the 0.5% gain posted by the broader S&P/ASX 200 Index (ASX: XJO).

Today’s share price gains follow Centuria’s announcement of 2 new logistics acquisitions.

Centuria Industrial REIT is a real estate investment trust and Australia’s largest domestic pure play industrial REIT.

What assets has Centuria acquired?

Centuria reported today that it has acquired 2 modern industrial facilities in Derrimut, Victoria. At a price tag of $37.25 million, they deliver an average initial yield of 5.1%.

Together, the 2 assets have an area of 31,466sqm, increasing the REIT’s portfolio weighting to Victoria to 38% (previously 37%).

The assets have a 4.6-year weighted average lease expiry (WALE) and are fully occupied by Volkswagen Group and Tasman Logistics.

Centuria notes that Derrimut offers excellent connectivity to key transport routes, such as the Western Freeway and the Western Ring Road. The facilities are just 20km from Melbourne’s CBD.

Centuria will fund the acquisitions using existing debt facilities.

Commenting on the news, CIP fund manager Jesse Curtis said:

The two Derrimut acquisitions were off-market opportunities that expand the trust’s critical mass, now totalling five stabilised assets, within this well-established industrial market. The properties are underpinned by strong tenant covenants with well-known national and international customers contributing to CIP’s reliable income streams.

Both assets provide low site cover within an in-demand precinct providing the opportunity to deploy our active management approach to build on CIP’s already high quality portfolio. As Australia’s largest ASX listed pure-play industrial fund, these acquisitions continue to demonstrate CIP’s ability to identify relative value for high quality industrial assets in a highly competitive environment.

Centuria Industrial REIT will report its first half of the 2021 financial year results on 2 February.

More on Centuria share price and company snapshot

Centuria’s portfolio of industrial assets are located across Australia’s major cities. The REIT has a market cap of $1.7 billion. It pays an annual dividend yield of 5.9%.

The Centuria share price is up 0.3% in 2021. Shares have yet to fully recover from the 39% loss suffered during the wider COVID-19 led market rout last February and March. Over the past full year, shares are down 14%.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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