Centuria Metropolitan buys $520 million property portfolio from Hines Global
Centuria Metropolitan REIT has acquired a portfolio from Hines Global REIT comprising four major properties, in the second largest commercial property transaction of the year.
The deal involves buying three office properties, and taking a 25 percent interest in a fourth.
The purchased buildings include 818 Bourke Street in Melbourne's Docklands (above), 825 Ann Street in Brisbane's Fortitude Valley (below), and 100 Brookes Street, also in Fortitude Valley.
The 25 percent interest is in 465 Victoria Street in Sydney's Chatswood. The remaining 75 percent of the building will be purchased by the Lederer Group
Centuria now manages over $300 million of direct real estate assets on behalf of the Lederer Group.
Centuria Capital Limited will contribute $20 million to the purchase price of the Chatswood block.
CMA will pay a total net price of $500.9 million, reflecting a 3.8% discount to the total independent valuations of $520.9 million, and an initial yield of 6.3%.
The acquisition will be partially funded by a fully underwritten equity raising of $276 million at an issue price of $2.43 cents per CMA security.
Jason Huljich, Centuria’s Head of Real Estate and Funds Management, said the properties are complementary to CMA’s existing portfolio and in line with its strategy of acquiring fit-for-purpose, quality metropolitan assets.
“Once this transaction is complete, CMA will be more than 84% exposed to key East Coast markets by portfolio value.
“This means a better growth profile for the fund going forward, particularly when you consider that 93% of leases are subject to fixed rental reviews of an average of 3.7% p.a.”,1 he said.
Commenting on the total acquisition and capital raising – which cumulatively represents Centuria Capital Group’s largest single direct transaction and the second largest commercial transaction in Australia this year, Huljich said the activity is evidence of the Fund’s repositioning strategy in action.
“Our aim has been to create a high-quality, pure-play A-REIT, with the kind of strong property metrics that can deliver returns for our investors in the form of consistent, attractive distributions. Over the four years since its inception, CMA has grown into the country’s second largest pure-play office fund, and this transaction will increase its portfolio by 56% to approximately $1.4 billion across 23 properties.
“This transaction is further evidence of our team’s ability to identify and deliver quality properties in a competitive market.
“We are pleased to announce this major transaction for CMA – not only because it improves the overall quality of the portfolio, but because it ultimately repositions CMA as a major office A-REIT, poised to deliver strong returns to investors.” Mr Huljich said.
