Centuria boosts logistic assets as LOGOS moves on park

Posted on 7th Oct 2020

Article by: Carolyn Cummins

The rush for industrial property has led to Centuria Industrial REIT increasing its exposure in Queensland while LOGOS Property has entered into exclusive due diligence on Qube Holdings $2 billion Moorebank logistics park.

In the long-running pitch for the south-west Sydney asset, Qube and LOGOS are in discussions to agree the level of ownership and assets which would be subject to the deal as well as the operating structure and arrangements for the Interstate and IMEX terminals.

Qube says it will only proceed with a transaction if it is able to realise appropriate value from its investment in the MLP "that supports the strategic objectives of, and continued growth in, this high-quality asset".

Any transaction would be subject to a range of third-party approvals, including from the Moorebank Intermodal Company.

For Centuria Industrial REIT, the country's largest listed Australian-focused industrial fund, it has paid $43 million for the 9554 sq m cold facility in Ormeau, Queensland, for an initial yield of 5.5 per cent to take advantage of rising demand for cold-storage facilities.

The acquisition takes the trust's total assets under management to 56 properties worth more than $2.1 billion. Within Queensland, it has a 15-asset portfolio.

Centuria Industrial REIT manager Jesse Curtis said a key growth thematic was the non-discretionary, food distribution and cold-storage industries.

This facility increased the trust’s exposure to food and cold storage-related users to almost 30 per cent by income, he said.

"There has been increased demand for refrigerated distribution centres especially throughout the COVID-impacted months as online grocery shopping has increased," Mr Curtis said.

"Additionally, there has been rising demand from both food and pharmaceutical-related users requiring climate-controlled facilities. This is creating an environment where tenant demand is outstripping supply."

The same fund has also opened the Townsville distribution centre in Jay Street, Bohle, which is leased to Woolworths for 12 years.

Industrial and logistics assets are now firmly at the heart of core investment strategies and have accounted for a record 20 per cent of the total investment volume into real estate in the first half of 2020, new research from Savills says.

Industrial investment volumes overtook retail for the first time last year, making it the third most invested asset class after offices and residential, while global yields now average 6.1 per cent, just 10 basis points above average global office yields.

"The current global ecommerce boom, accelerated by consumers shifting their purchasing online throughout the pandemic, has been a major catalyst for this sector’s growth," Paul Tostevin, director of Savills world research, said.

"Ecommerce isn’t necessarily the sole factor boosting demand. Recent supply chain disruption, coupled with escalating trade wars, is leading to supply chain diversification, boosting demand for industrial and logistics space in strategic locations closer to the major consumer markets."