Centuria Industrial REIT (ASX:CIP) is raising $125 million to fund cold storage acquisitions 

  • November 17, 2020 03:48 PM AEDT
  • Kunal Sawhney
    Kunal Sawhney
    CEO Kunal Sawhney
    2781 Posts

    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

Centuria Industrial REIT (ASX:CIP) is raising $125 million to fund cold storage acquisitions 


  • Centuria Industrial REIT is acquiring three cold storage facilities on the east coast. 
  • It is raising $125 million from institutional investors via fully underwritten offer. 
  • The industrial REIT has reaffirmed distribution guidance and upgraded FFO guidance. 

Centuria Industrial REIT (ASX:CIP) has executed contracts to acquire three cold storage facilities for $171.1 million. It is also undertaking a $125 million fully underwritten institutional placement, which would be partially used to fund the transaction. 

The three properties are located in New South Wales, Victoria, and Queensland. Fund Manager Jesse Curtis said that cold storage acquisitions depict their expectation for growth in the refrigerated logistics industry. 

Image Source: © Kalkine Group 2020

This expectation is, in part, driven by the rise in online food sales. Located in close proximity to the industrial market of Sydney, Melbourne and Brisbane, these properties have favourable connectivity. 

After the completion of the acquisition, the industrial REIT will have an asset size of 59 high-quality assets worth $2.3 billion with an occupancy of 96.8%. The overall portfolio would have a WALE of 9.7 years. 

CIP is undertaking a placement at an issue price of $3.06 per unit. It is drawing $58.7 million from the existing debt facility to partially fund the acquisitions and related costs.

The acquisition will be accretive to CIP’s FY21 FFO per unit. The industrial REIT has upgraded FFO guidance, which is expected to be a minimum of 17.5 cents per unit. It has also reaffirmed FY21 distribution guidance of 17 cents per unit. 

Pro-forma gearing of the REIT is forecast at 31.4% after the acquisition and placement. And pro forma NTA per unit is forecast at $2.81 per unit. With a gearing of around 31%, the REIT has the capacity to pursue an acquisition strategy. 

67-69 Mandoon Road, Girraween NSW

The property is closest to Paramatta CBD and is within reasonable distance of infrastructure hubs – Sydney International Airport and Port Botany. It is a temperature-controlled property, which would be acquired by sale. 

The cold storage asset would be leased back to Bidfood NSW. It is on a 7-year triple net lease with fixed annual rental reviews at 3%. The purchase price of the asset is $73.1 million. 

45 Fulton Drive, Derrimut VIC 

CIP is purchasing the asset for $49 million. The asset has a size of around 11k sqm high quality refrigerated distribution centre. It is under a 5.8-year lease with annual rent reviews of greater than CPI or 2.5% with a cap of 5%.

It is located in Melbourne’s western industrial precinct with good connectivity to the surrounding road network. Key infrastructure hubs near the asset include Port of Melbourne and Melbourne Airport. 

60-80 Southlink Street, Parkinson QLD

The purchase price of the property is $49 million. Key infrastructure hubs close to the asset include Port of Brisbane and Brisbane Airport. It can be operated at -25 degrees Celsius and has cross-dock loading and administration office. 

It is leased on a net lease with annual rent reviews of greater than CPI or 2.5% with a cap of 5%. The property has undeveloped land and provides scope for future development in a land constraint market. 

On 17 November 2020, CIP was trading at $3.150, with a market capitalisation of $1.60 billion.



The website https://kalkinemedia.com/au is a service of Kalkine Media Pty. Ltd. (Kalkine Media) A.C.N. 629 651 672. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.


We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK