Centennial's penchant for acquiring prime last mile logistics sites in the country's tightly held and land constrained infill areas continues to gather pace, with the active fund manager and developer buying a prominent site in Bulimba, 4km from Brisbane's CBD for $13.1m. 

Centennial secured the 9,264sq m site owned by longstanding signage manufacturer, Albert Smith Signs at 59 Taylor Street, through an off-market deal brokered by Modus Property Group's David Gibson and Nick Bandiera. 

The sale was subject to Albert Smith Signs retaining a two-year triple net lease with a further one-year option. The well-known signage group has been operating from the same location for 35 years, and occupies 4,936sq m of gross lettable area across two buildings, which could accommodate a range of tenancies, when the leaseback expires and the buildings are refurbished and repositioned. 

Centennial's Head of Property Funds, David Cupit said the income producing asset, acquired on an initial passing yield of 5.35 per cent, was an attractive investment given its strong de-risked cash flows. The asset will be added to Centennial's Enhanced Value Partnership (EVP) fund, established with JV partner Brookfield in mid-2023. 

"The site is zoned General Industry A, offering multiple tenant usages from services to low impact industrial," Mr Cupit said. "We will draw from our strengths operating in the mid-space industrial and logistics sector to maximise site utilisation and rental returns." 

Land of scale in Bulimba is scarce and commands premium rents due to its last mile location, connectivity to major arterial roads and proximity to port and air freight hubs.  

"While the rate of rental growth has slowed recently from historical highs, limited availability of stock and land within Bulimba and the southern TradeCoast more broadly will continue to provide upward pressure on rents and above trend rental growth. 

"Land in Bulimba is extremely rare, which is especially the case for industrial parcels," Mr Cupit said. "Underscoring the site's excellent development upside is Bulimba's emergence as one of Brisbane's top ten suburbs for median house price, which is currently sitting at $1.88m. The site is also under 200 metres from the Bulimba Barracks mixed-use residential redevelopment that will add a further 800 new dwellings to the area." 

Mr Cupit added that as land supply continued to diminish in the greater Brisbane area, particularly in last mile locations where sites are converted to higher and better uses, Bulimba would become an even more desirable location for occupiers and investors looking to tap into an immediate and reachable affluent customer-base and connecting freight routes. 

Modus Group's Partner, David Gibson said the site drew spirited interest from multiple parties based on the landholding's strategic and infill nature within a very desirable location poised to capitalise on significant future capital growth. 

"Securing this site is a generational opportunity," Mr Gibson said. "It possesses all the hallmarks of a sought-after asset and given its range of functional improvements, significant positive reversion opportunities and future development upside, the asset was strongly contested. We are delighted to see the site changing ownership and into the very capable hands of Centennial." 

Centennial's latest acquisition comes off the back of a high level of activity in Brisbane's industrial and logistics sector with the fund manager having recently acquired the 5.6ha Cleveland Industrial Park in Brisbane's bayside for $31.2m in late August, and also fast tracking construction on the second stage of its 9,010sq m Geebung Industrial Park in Brisbane's inner-north following strong leasing pre-commitments. 

Related readings 

Centennial's $20M Capital raise sparks investor interest in Cleveland Industrial Park Trust | The Industrialist

Centennial and JV partner MaxCap Group's $100m 'The Link Industrial Park' built by McNab reaches practical completion 

Centennial acquires broadacre industrial asset Ipswich sold for $35.5 million - Blue Commercial