$40m DFO Cairns sale

April 2, 2016

The new owner of the DFO shopping centre at Westcourt will tap into the rebounding tourism sector to capitalise on their new $39.7 million investment.

The Brisbane-based Sentinel Property Group says the property is their biggest retail acquisition and represents “a major boost to Sentinel’s national retail portfolio and its growing presence in the North Queensland property market”. Sentinel managing director Warren Ebert said it was “landmark acquisition”.

“This is our largest ever retail purchase in both value and size and also provides us with a high profile entry into the Cairns market,” he said. “We have been actively growing our property presence in North Queensland in recent years and have been searching for a prominent Cairns property to which we can add significant value. “We are delighted to have secured the DFO Cairns retail centre and we now look forward to working closely with its retailers to maximise the property’s solid underlying fundamentals and future growth potential.”

Mr Ebert said a recent focus of Sentinel’s expansion strategy has been on acquiring property in key locations in North Queensland that were well positioned to benefit from the rebounding tourism sector. “Sentinel has built its success on identifying and unlocking value where others do not, and we see great potential to capitalise on the size, location and tenancy profile of DFO Cairns with our hands-on specialist retail leasing and management skills,” he said. “We also believe the property is very well positioned to enjoy the positive flow-on benefits form the rebounding tourism sector in Cairns, already evident in the strong growth in visitor numbers, increased direct flights from China and the major development of the Cairns airport.”

The centre sits on 8.15ha site with a total floor area of 25,000sq m and parking for more than 1500 vehicles. It is the only direct factory outlet north of Brisbane and is home to an array of national and international tenants, including Coles, Hungry Jacks, Trade Secret, Bonds, EB Games, Ralph Lauren and Royal Doulton.

Sentinel’s capital raising to buy the centre closed oversubscribed from investors in just 24 hours. The property will be held as the sole asset of the Sentinel DFO Cairns Trust, which has forecast three year average distributions of 10.5 per cent per annum.

According to CoreLogic RP Data DFO bought the 8.15ha centre in 2006 for $45m from Trinity Fund Management Ltd. It is one of the last DFO centres operated by the failed Austexx group.

Late last year Sentinel snapped up the property housing Big W at Atherton for $10.35m. The unlisted commercial property fund manager, established in 2010, has assets under management of nearly $1 billion and owns and manages a national portfolio of 42 retail, industrial, office, land and tourism infrastructure assets throughout Australia.

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