Centuria Industrial REIT (ASX:CIP) raises $300 mil to purchase industrial assets

Centuria Industrial REIT (ASX:CIP) has raised $300 million through an institutional placement announced yesterday to acquire 8 freehold urban infill industrial assets for a total of $351.3 million.

The real estate powerhouse said the acquisitions were made to expand their exposure across industrial sub-sectors including distribution centres, cold storage and transport logistics, which are experiencing strong tailwinds underpinned by accelerating consumer shift to online retail. The purchase is anchored by a $200.2 million distribution centre located in Western Sydney’s Fairfield along with 7 other urban infill assets.

Yesterday fund manager Jesse Curtis said, “the acquisitions are strategically located in core urban infill industrial markets, predominantly on the eastern seaboard and 67 per cent weighted towards Sydney’s highly desirable central west market where vacancy of less than 1 per cent and limited land supply is driving strong market rental growth.” 

The placement was undertaken to provide capacity to debt fund its pipeline of acquisitions in due diligence. The company issued 78.9 million new shares at $3.80 per share, reflecting a 5.2 per cent discount to last closing price of $4.01 per share on Wednesday.

Today Jesse Curtis said, “the placement received strong demand from new and existing institutional investors, indicating clear endorsement of CIP’s strategy and management capability to build scale and amass, off market, a high-quality portfolio of urban infill industrial assets to deliver value to unitholders.”

Centuria Industrial REIT also plan to undertake a non-underwritten unit purchase plan, to raise up to $25 million.

Shares in Centuria Industrial REIT (ASX:CIP) are trading 5.9 per cent lower at $3.77.