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Centennial secures key assets in Sydney as price moderates
- Centennial secures two major industrial and logistics assets at Brookvale and Prestons in Sydney for their new $700m Enhanced Value Partnership (EVP) fund with Brookfield Real Estate Secondaries
- Brookvale Industrial Park conditional acquisition for ~$84m – 41,870 sqm land | GLA 29,607 sqm
- Prestons Logistics Facility site acquired for $79m – 53,260 sqm land | GLA 15,030 sqm
- Centennial-managed EVP Fund now has seven I&L assets in the fund since May 2023 launch worth $293m
- Both assets acquired with significant improvements at close to land value with multiple value add opportunities
SYDNEY, NSW: The successful capital raising by national property fund manager Centennial and joint venture partner Brookfield Real Estate Secondaries to form the $700m ‘Enhanced Value Partnership’ (EVP) fund, has enabled the new investment vehicle to move quickly to secure two prime industrial and logistics assets in Sydney for around $163m.
The Fund has acquired two industrial infill sites at Brookvale in Sydney’s highly land constrained Northern Beaches region and the tightly held and also land constrained industrial precinct of Prestons in the south west.
The two acquisitions give the EVP fund a foothold in Sydney’s mid-space, urban logistics sector with both sites offering solid passing income, revenue growth and excellent incremental redevelopment opportunities.
“The two new assets are a perfect fit for our $700m EVP fund which recently closed oversubscribed,” said Centennial’s Executive Director and CEO Industrial & Logistics, Paul Ford.
“We’ve been really selective in our site choices in Sydney and are very happy with the Prestons and Brookvale sites given their land rich nature along with flexible improvements that align with our niche strategy, focusing on mid-space, urban infill sites within land constrained or last mile logistics areas,” he added.
Conditional contracts have been exchanged on the Brookvale site comprising two adjoining industrial parks spanning ~42,000 sqm at 114 and 120 Old Pittwater Road. The asset will be acquired from Centuria Capital Group, subject to completion of conditions precedent. The transaction was brokered by Gavin Bishop of Colliers and CBRE’s Chris O’Brien.
Purchased as two separate lots for ~$84m, the Brookvale site affords Centennial flexibility for future redevelopment including the potential to build a multi-storey warehouse to take advantage of Sydney’s critically low vacancy rates.
The multi-tenanted site contains 29,607 sqm of gross lettable area (GLA) housing a range of blue-chip tenants including a Woolworths distribution centre, FujiFilm, Padi Asia and state and federal government departments including the Australian Electoral Commission.
“Another factor in our decision to purchase the site was the Draft Brookvale Structure Plan’s new zoning height limits which may be increased to possibly pave the way for a multi-storey warehouse,” Mr Ford said. “The asset currently has a 40/60 per cent office to warehouse ratio with the potential of converting less favoured offices into high-tech and warehouse space to better suit market demand.”
Colliers’ Managing Director Industrial, Gavin Bishop said the Old Pittwater Road site was an irreplaceable northern Sydney land holding underpinned by a strong tenancy profile and multiple value add opportunities.
“The site’s location is in a sought-after location in the Northern Beaches, offering excellent transport linkages and lends itself to a range of long-term redevelopment possibilities to take advantage of the zoning and limited competing land availability,” Mr Bishop said.
Over in Sydney’s south west in the established industrial corridor of Prestons is where Centennial made its second purchase from vendor, Charter Hall for $79m, in a deal brokered by Cushman Wakefield.
Covering a land rich 5.3ha site at 115 – 121 Jedda Road, Prestons, the asset contains two large format generic refrigerated logistics facilities, occupied by Primo Smallgoods that sub-leases part of its warehouse to supermarket giant, ALDI.
Head of Property Funds, David Cupit said Centennial was delighted to secure the Prestons site and expand its presence in the south west. “The Prestons site is extremely well located adjacent to major road and transport infrastructure networks together with the new Western Sydney Airport, 13km from the site and due to open in 2026.
“The Prestons site is a high income producing asset offering certainty of income from a multi-national tenant, along with the ability to create additional GLA. Given the site’s suitability for future development and reconfiguration, we are confident of adding value to the asset and repurposing it into an institutional-grade investment.”
“Underpinning the asset’s de-risked cash flow is Sydney’s south western suburbs having some of the tightest vacancy rates in the country at around 0.1 per cent,” said Cushman Wakefield’s International Director I&L Tony Iuliano. “The location is currently experiencing a severe lack of available developable land, with demand for scale in the south west continuing to drive land value and growth.”
The addition of the two new Sydney sites brings Centennial’s total industrial and logistics platform to 68 assets located throughout New South Wales, Victoria, Queensland and South Australia and valued in excess of $1.5bn with a development pipeline of circa $350m.
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