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Highlights:
- On Wednesday (21 September 2022), Centuria shared that it has acquired 50% interest in Allendale Square office towers.
- The fund manager has bought the property with MA Financial for AU$223 million.
- To fund the transaction, Centuria is expected to conduct a capital raise of AU$70 million.
ASX-listed fund management company, Centuria Capital Group (ASX:CNI) informed the market that it has acquired 50% interest in an A-Grade Perth office building, which would form a new wholesale property fund – Allendale Square Fund. Reportedly, rest 50% is bought by MA Financial Group Limited (ASX:MAF), under the 50:50 joint venture partnership.
According to ASX announcement dated 21 September 2022, the new fund would be an ‘unlisted single-asset close-ended wholesale property fund.’
Details of the acquisition
The 50% acquisition of Allendale Square Office tower is part of a counter-cyclical investment strategy, supported by local market tailwinds, said Centuria in a statement.
As per the company’s release, the transaction will be conducted for AU$111.5 million on a 7.25% capitalisation rate.
The minimum entry investment of the new fund is AU$100,000. The company would seek to raise approximately AU$70 million to launch the fund.
About the Allendale Square
Allendale Square is a 31-storey office building which is located in Perth. The office building offers 25,908 square meters of office accommodation and 2,745 square meters of retail space. The property is located in close proximity to Elizabeth Quay. The building offers direct access to the rejuvenated waterside precinct.
The weighted average lease expiry (WALE) of Allendale Square is 5.9 years, and occupancy is 85%.
Management Commentary
On the development, CEO of Centuria, Jason Huljich commented:
Relations between MA Financial and Centuria
Centuria said it is the second joint venture with ASX-listed diversified financial company, MA Financial. The first one was formed to secure 25 Grenfell Street Adelaide. Centuria has already completed the AU$48.5 million capital raise to fund the acquisition of the close-ended Centuria 25 Grenfell Street Fund.
Share performance of Centuria
Shares of Centuria have been under significant selling pressure lately. In last one month, the share price has dropped approximately 4.30%. In last six months, the share price has dropped almost 37%. The yearly fall is around 50%, and on a year-to-date basis, the share price has declined almost 50% (as of 12:39 PM AEST on 21 September 2022).
