Centennial has sold its recently refurbished Acacia Industrial Park to a private interstate investor for $55m, which is more than triple the price the national fund manager and developer paid for the ageing vacant site just four years ago.

Centennial acquired the 4.7ha site for $17.5m in late 2019 from Blackstone, as ‘vacant possession’, housing a 26,527sq m single tenancy warehouse, 1,577sq m detached office and 12,800sq m hardstand areas.

After completing an extensive $12.5m upgrade to the warehouse by splitting it into four smaller tenancies, raising roof clearances up to 12.2m together with increasing slab thickness to the hardstand areas to cater for B-double manoeuvring, Centennial’s institutional grade conversion was unveiled with a full tenant roster and buyers circling.

The off market sale was brokered by Callum Stenson of Savills. He said the site’s dual street access and prime Acacia Ridge location – which is considered to be the industrial heartland of Brisbane’s inner-south – together with an enviable mix of tenants and high-level refurbishment, ticked all the investor boxes.

“Centennial has created a very good investment property for the passive investor,” Mr Stenson said. “All the hard work’s been done and it represents a solid, sound long term investment opportunity.”

Widely regarded as a leader in ‘upcycling’ mid-size urban industrial infill sites, when Centennial acquired Acacia Industrial Park, the premises had struggled to attract a tenant to occupy the large unimproved warehouse after former tenant, Mitre 10 vacated.

A major factor in Centennial acquiring Acacia Industrial Park was its capacity to be reconfigured from a single tenancy into four, to capitalise on the area’s record low vacancy rates within the urban mid -pace subsector, currently sitting at around zero per cent according to Urbis’ September ’23 industrial vacancy report.

“This latent demand was evident by the short leasing campaign with all available tenancies leased prior to practical completion and the results continue to support our niche, urban, land constrained, mid-space strategy,” said Paul Ford, Centennial’s Executive Director.

“It was also very rewarding to see the end product taken up so quickly, on the back of our major refurbishment that included Brisbane’s first roof raise of this scale and nature.”

Each of the four new warehouses boasts internal ceiling heights up to 12.2 metres after removing an original sawtooth roof and raising it by 5 metres to accommodate increased warehouse space and heavy vehicle access from all-weather loading docks sheltered by 10-metre cantilevered awnings.

Modern, architecturally designed offices were added plus a range of sustainable initiatives to both internal and external areas with hardstand slab areas thickened for B-double manoeuvring plus the addition of container storage and set down areas and secure perimeter fencing with native landscaping.

“By undertaking a refurbishment and repurposing and regenerating the asset, rather than a knockdown and rebuild, Centennial has saved ~22,400 CO2, which is the equivalent carbon footprint of driving about 440 Toyota Camry hybrid cars (2020 model) for 200,000km each on our roads (operating carbon),” Mr Ford added.

“Also, by reducing or reconfiguring the floor spaces, we were able to tap into a larger tenant pool and as our latest refurbishment demonstrates, continued demand for quality mid-space leasing opportunities in prime urban infill areas is and will remain robust into the foreseeable future.”

Acacia Ridge is considered the industrial heartland of Brisbane’s inner-south, based on its proximity to major transport and freight networks, CBD and the Acacia Ridge intermodal freight terminal, just under 1 kilometre away.

Centennial’s strategy of acquiring mid-space urban infill sites suitable for value-adding and repurposing into multiple tenancies ranging from 1,000 to 10,000sq m continues to be a proven and successful strategy for the group, with Acacia Industrial Park underscoring the ongoing salient demand in the mid-space sector.

The site was fully leased prior to practical completion, brokered by Jack Hardy of CBRE, David Brisk of Colliers and Jack Barrett of Agency HQ and the sale brokered by Callum Stenson of Savills Australia & New Zealand. 

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