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- Centuria (CNI) acquires a 14-level $224 million office building in Footscray, Victoria for a new unlisted fund
- The new fixed-term, single-asset fund, Centuria Government Income Property Fund, will seek to raise $133 million
- The fund forecasts a 5.25 per cent starting yield and will be held for an initial five-year term
- Centuria Government Income Property Fund’s capital raise is expected to open from July 1, 2021 and anticipated to close on July 28, 2021
- Shares in Centuria are up 0.37 per cent, trading at $2.70 at 11:54 AEST
Centuria (CNI) has acquired a 14-level $224 million office building in Footscray, Victoria for a new unlisted fund.
The new fixed-term, single-asset fund, Centuria Government Income Property Fund, will seek to raise $133 million.
This is Australia’s largest single-asset retail capital raise within the past 15 years.
The A-Grade office building, located at 1 McNab Avenue, Footscray, was secured with 100 per cent occupancy on an 11.8-year weighted average lease expiry on a market capitalisation rate of 4.7 per cent.
The 20,191-square-metre structure was completed in 2014 and has nine floors of business space, four levels of secure parking and NABERS energy and water ratings of 5.5 stars.
Victorian Government departments and agencies occupy 91 per cent of the building, including City West Water (32.5 per cent), State Trustees Limited (31.1 per cent), and the Victorian Government’s Treasury and Finance Department (27.5 per cent).
The fund forecasts a 5.25 per cent starting yield and will be held for an initial five-year term.
Centuria joint CEO Jason Huljich said this will be its largest capital raise to date for a single-asset unlisted fund.
“In this low interest rate environment, there is a strong appetite from retail investors who are searching for investments with compelling yields,” he said.
“We continue to witness this strong appetite with the oversubscription of our recent unlisted fundraisings. In FY21 to date, our unlisted division has executed six capital raises across four single and multi-asset fund mandates. Combined, we have raised over c.$184 million to deploy across attractive unlisted real estate opportunities throughout Australasia.”
With rising white-collar employment and workforces increasingly returning to the office, Mr Huljich believes office asset investments will increasingly deliver strong results.
“Already within the past few months, we’ve witnessed several large office transactions in the domestic market,” he said.
Following the merger with Primewest becoming unconditional, Centuria will be one of the largest unlisted property fund managers in Australasia.
It will see the company enjoy around $10 billion of assets under management across its unlisted platform and more than $16 billion of assets under management across the group platform.
Centuria Government Income Property Fund’s capital raise is expected to open from July 1, 2021 and is anticipated to close on July 28, 2021.
Shares in Centuria are up 0.37 per cent, trading at $2.70 at 11:54 AEST.
