Centuria Capital Group (ASX: CNI) has acquired 100% interest in an A-grade office and carpark property in Adelaide’s core CBD precinct from Lendlease’s Australian Prime Property Fund Commercial. The acquisition appears to be driven by CNI’s recognition of Adelaide’s pipeline of approximately $130B of infrastructure and defence projects, and the low interest rate environment encouraging stronger demand for real estate assets.
Constructed in 2006, the asset located at 80 Flinders Street was acquired for $127M on a passing yield of 6.1 per cent and a 4.04 yr WALE. The property recently underwent refurbishments in 2019 with upgrades to their lobby and end of trip facilities. The asset of 12,154 sqm is fully leased and is well supported by 95% of income coming from multination and ASX listed companies. It also features 694-car park spaces.
The acquisition builds upon the Group’s $0.9B of acquisitions in FY19 and will be placed into a new Centuria Unlisted Fund that will be launched in August 2019. It is expected to deliver distribution yields of 6.5% and 6.6% in FY20 and FY21 respectively.