Centuria Capital has acquired the Port Adelaide Distribution Centre for A$216m (€121m) in Australia.

The Australasian fund manager is seeking to raise an undisclosed amount of capital for the Centuria Port Adelaide Industrial Fund (CPAIF), a new fund that holds the 32ha Port Adelaide Distribution Centre industrial estate as its sole asset.

The asset was acquired at a 70% discount to its replacement cost in a market where current vacancy is 1.5%.

Spanning thirteen buildings and leased to 17 tenants, the industrial estate has a 93% occupancy and a 3.4-year weighted average lease expiry.

Andrew Essey, Centuria CIO, said: “This was a rare opportunity to secure a trophy Adelaide asset at a time when the local market benefits from cyclical tailwinds credited to low vacancy, strong leasing demand and limited new supply. Adelaide has one of Australia’s strongest leasing markets with materially lower rents in comparison to other capital cities.

“With 60% of Adelaide’s industrial pipeline already pre-committed, we believe supply constraints will continue to drive opportunities for positive rental reversions within the industrial park. The estate has a long history of low vacancy due to occupiers’ preference to be within close proximity to the port and road and rail infrastructure.”

Jesse Curtis, Centuria head of funds management, said: “CPAIF is an attractive opportunity for investors to gain exposure to an industrial investment that provides potential for strong income yield and capital and income growth from anticipated rising rental rates and value-add potential.”

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