Centuria buys Canberra office property for $256m

10 December 2019, Written by Matt Ogg

Centuria buys Canberra office property for $256m

Centuria Capital Group (ASX: CNI) now spent more than $700 million on office property acquisitions in the space of three months following the purchase of Canberra's NewActon Nishi Building.

Centuria Capital Group (ASX: CNI) has today announced a subsidiary has acquired the Canberra property for $265 million, with funding support to come from $195 million in capital raisings.

Centuria Metropolitan REIT (CMA) fund manager Grant Nichols says the purchase reinforces the fund's position as Australia's largest listed pure-play office REIT, with a diversified portfolio of assets underpinned by strong tenant covenants.

The occupancy rate of the Canberra property is estimated at 99.5 per cent.

"NewActon Nishi Building is a high quality A-grade commercial office asset, leased predominantly to the Federal Government and strategically located in NewActon, a vibrant and gentrifying precinct within Civic, Canberra," says Nichols.

"The building, completed in 2012, is highly recognised with several industry awards, including 'Best International Project of the Year' by the Building Awards in London, and will lower the average age of CMA's portfolio from 16.4 years to 15.2 years. 

"Geographic diversification is improved as the Acquisition increases the portfolio weighting to the ACT, which is Australia's fourth largest office market, from 5 per cent to 16 per cent."

Nichols notes Federal Government tenants now account for 54 per cent of CMA's rental income.

The move follows the group's recent purchase of 348 Edward Street in Brisbane's CBD for $89 million, and the $381 million spent on office properties in Sydney and Perth.

In the announcement, CMA also also notes it is no longer actively marketing the sale of 483-517 Kingsford Smith Drive in Hamilton, Brisbane, due to the reduced geographic weighting towards Queensland after the acquisition.

In light of a $30.8 million boost from the independent valuation of eight properties, group assets under management (AUM) are now very close to the $6.9 billion mark.

Centuria will now be raising $185 million through an instutional placement at $3 per CMA unit, representing a 4.7 per cent discount to the last closing price. This will be followed by a unit purchase plan to raise up to $10 million.

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Author: Matt Ogg

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