Centennial's appetite for prime, last mile industrial sites in Brisbane's Australia TradeCoast is gathering pace and scale with the group notching up its ninth I&L asset within the surging economic trading zone after acquiring a 3.46-hectare infill site for $18.5m from Lendlease.

The national fund manager and developer, which specialises in acquiring mid-size, last mile, industrial and logistics assets acquired the vacant site, 5 kilometres north east of Brisbane's CBD at Morningside through a deal brokered by Cushman & Wakefield's Gary Hyland and Owen Byles.

"As a genuine last mile location close to Brisbane's CBD, there are very few freehold sites of this scale available," Mr Hyland said.  

"Strong rental growth is being realised in the immediate precinct which is in excess of 11 per cent over the past 12 months, compared to the national average growth of 6.6 per cent over the same period.

Coupled with the lowest vacancy rates in south east Queensland at 2.4 per cent, Centennial has secured an institutional-grade land holding that is poised to offer future capital growth in a legitimised, core infill industrial location."

The cleared site has development approval for a multi-unit estate that will yield ~17,000sq m of gross lettable area, comprising up to twelve small to mid-space tenancies ranging from 400sq m to 6,000sq m across four buildings, with the capacity to house up to ~12,000sq m as a single user. Construction is expected to start in January with a completion date earmarked for December 2025.

Centennial's Head of Property Funds David Cupit said the group's latest acquisition will be added to its Enhanced Value Partnership fund.

"The EVP fund's mandate, now comprising 12 assets with the inclusion of Morningside, typically targets mid-size estates and buildings located in core inner-ring and land constrained regions and valued between $10 to $75m upon stabilisation," Mr Cupit said.

"We are very confident in our latest site asset given Morningside is a well-established industrial suburb and highly sought after based on its direct proximity to major road, rail, airport networks and Brisbane CBD."

The Australia TradeCoast (ATC) submarket has some of the lowest available supply of both development and confirmed redevelopment stock for industrial land in Brisbane with 2.4 per cent vacancy rates across the ATC, with supply of mid-sized stock sitting even lower at around 0.6 per cent. 

Centennial currently has nine assets located within Brisbane’s Australia TradeCoast precinct.

Underscoring the supply and demand metrics, Mr Cupit noted that forecast supply in the TradeCoast precinct was the lowest of all Brisbane industrial precincts with only ~80,000sq m under construction or mooted over the foreseeable future.

"Developable land in Morningside is scarce so we expect there to be continued upward pressure on rents with new, institutional-grade stock being well placed to command premium rents.

"The ATC is the second largest employment zone in Queensland after Brisbane's CBD and is a key driver of economic growth for the state. 

"Tenants will also benefit from connectivity to nearby freight networks and the major influx of residents moving into the area driven by the redevelopment of the nearby Bulimba Barracks, that will add 850 new homes and associated retail amenity into immediate area," Mr Cupit said.

The addition of TradeCoast Connect brings Centennial's total assets to 84 and over $2.4 billion under management.  

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