Why the Centuria (ASX:CIP) share price is on the move today

The industrial real estate investment trust’s shares are closing in on their all-time high

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The Centuria Industrial REIT (ASX: CIP) share price is edging higher today. This comes after the industrial real estate investment trust (REIT) announced a number of acquisitions.

At the time of writing, Centuria shares are up 0.54% to $3.74.

What did Centuria buy?

In today’s statement, Centuria has secured 3 industrial properties worth a total of $86.1 million. The acquisitions give the REIT an average yield of 5% and a weighted average lease expiry (WALE) of 5 years.

Following settlement, the Centuria portfolio will increase to 66 properties and have a value of more than $3 billion.

Two of the assets acquired are in the northern Melbourne suburbs of Broadmeadows and Epping. The Broadmeadows property is a manufacturing facility leased to Rollease Acmeda, a manufacturer and distributor of window coverings systems. The Epping asset is a distribution centre housing 2 tenants, Grace Australia and Gruma Oceania.

The third property is situated in Wetherill Park, New South Wales, and is also a tenanted distribution centre.

The transaction is expected to be funded through use of the REIT’s existing debt facilities.

Management commentary

Centuria fund manager Jesse Curtis said of the acquisitions:

The three assets were secured off-market and continue to grow CIP’s exposure to the highly sought-after and tightly held infill industrial markets of Melbourne and Sydney. The portfolio provides a rare mixture of short WALE assets, providing the opportunity to add value and take advantage of low vacancy rates through strategic leasing, while also adding a core long WALE asset.

… CIP’s strategy is to secure high-quality industrial assets within key metropolitan locations and this portfolio transaction is in keeping with this direction. These acquisitions continue to build our strong track record of identifying value and providing value-add opportunities through repositioning and active leasing to deliver reliable income returns and capital growth to our unitholders.

Centuria share price summary

It’s been a positive 12 months for Centuria shareholders, with the REIT shares lifting 25%. It’s worth noting Centuria is closing on its all-time high of $3.83 achieved earlier this month.

Based on today’s price, Centuria has a market capitalisation of $2 billion, and has just over 551 million shares outstanding.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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