Centuria Completes Warehouse Redevelopment at 30 Fulton Drive, Securing 42% Re-Leasing Spread in Derrimut

Centuria Industrial REIT (ASX: CIP) has completed a nine-month redevelopment of its industrial facility at 30 Fulton Drive in Derrimut, Victoria, expanding the warehouse's lettable area and securing a new five-year lease at a 42% re-leasing spread above prior accommodation rents, the firm announced.

The redevelopment, carried out by Centuria's in-house development team, extended the original approximately 10,600-square-metre warehouse by 2,700 square metres and added a 35-metre super awning, eight additional roller doors, a new approximately 4,000-square-metre hardstand, two recessed docks, solar and skylight installations, and electric vehicle chargers. The asset is now fully leased.

Warehouse Redevelopment Scope and Sustainability Features

The project incorporated a range of sustainability upgrades. According to Centuria, 92% of materials were recycled through retention of the existing structure and reuse of steel, concrete, roofing, timber, and hardstand materials. A 99-kilowatt solar system was installed, with the roof structure engineered to support up to 400 kilowatts immediately and 700 kilowatts in the future. Ten percent translucent roof sheeting was added to improve natural light and reduce energy consumption.

Additional sustainability features include two rainwater tanks providing 25,000 litres of storage for non-potable reuse, seven newly installed EV chargers with infrastructure to convert 25% of the carpark to EV bays, and undercover bicycle parking with e-bike charging and motion-activated lighting. The redevelopment also delivered new office accommodation with upgraded mechanical and hydraulic services and end-of-trip facilities.

Though the project does not qualify for Green Star certification — a standard that excludes redevelopments — Centuria noted the scope of sustainable features delivered across the asset.

Derrimut Industrial Precinct

The property is located in Derrimut, a Melbourne industrial precinct situated approximately 17 kilometres from the CBD, 19 kilometres from Melbourne Airport, and 18 kilometres from the Port of Melbourne. Centuria cited the area's connectivity to key road arterials as a driver of persistent tenant demand, with precinct vacancy running at approximately 3%.

According to Cushman & Wakefield's Australian Market Overview for Logistics and Industrial, Australia's national infill industrial vacancy rate stands at 2.4%, well below the non-infill vacancy rate of 4.0%.

CIP holds an 86,400-square-metre landholding in the Derrimut precinct and counts Woolworths, Tesla, Beacon Lighting, and United Rentals among its blue-chip tenants in the area.

Grant Nichols, CIP Fund Manager and Centuria Head of Listed Funds, said: "Derrimut is a prime urban infill industrial precinct due to its proximity to densely populated areas, limited industrial land supply, and persistent high occupier demand. This was a rare opportunity to harness these strong market tailwinds by delivering an enhanced industrial facility that has generated a stronger income for the REIT."

Value-Add Strategy

CIP originally acquired 30 Fulton Drive in 2021. The warehouse, built approximately 35 years ago, has now been repositioned with improved overall efficiency, increased lettable area, and enhanced amenities.

Andre Bali, Centuria Head of Development, said: "The Derrimut redevelopment is indicative of how our in-house development team can enhance the performance of our existing portfolio. Australia's domestic infill industrial market is extremely constrained meaning there are not enough warehouses to meet burgeoning demand from occupiers in locations where we have existing landholdings."

Bali added that demand is being driven by population growth, increased e-commerce activity, and continued onshoring of supply chains, and that despite rising construction costs, redevelopments such as 30 Fulton Drive demonstrate the commercial value that can be extracted from existing portfolios.

Sources

Centuria – Warehouse redevelopment provides 42% re-leasing spread