Investors reap rewards of precinct demand

December 7, 2017

The Sunshine Coast Daily

Sentinel Property Group has sold a warehouse/office facility leased to Bluescope Distribution Pty Ltd on a long-term lease at Banyo in Australia TradeCoast precinct on Brisbane’s northside for $36.775 million.

The steel processing and distribution facility on a 47,880sq m site at 920-928 Nudgee Rd was sold to a private investor in a deal negotiated by Ed Bull from CBRE for a yield of about 6.70 per cent.

Sentinel’s Banyo Industrial Trust is forecast to achieve a total internal rate of return of about 24 per cent over the 6.5 years of ownership.

Sentinel managing director Warren Ebert said the group had purchased the Banyo site in April, 2011, for $23 million and the sale price was an outstanding result for investors.

“This transaction showcases Sentinel’s ability to buy at the right time, and sell at the right time,” Mr Ebert said. “Our decision to sell this high-performing asset is consistent with Sentinel’s strategy of buying at an opportune time and then selling based on our view of the market.”

The entire property is leased to Bluescope Distribution Pty Ltd, a subsidiary of ASX-listed Bluescope Steel Limited, until 2026.

Mr Ebert said Sentinel had been both a buyer and a seller of industrial property in the prime TradeCoast precinct, recently purchasing a waterfront bulk storage facility at nearby Pinkenba for $48.5 million in a leaseback arrangement with global diversified industrial chemical company Incitec Pivot Pty Ltd.

“The proximity to Brisbane Airport, Port of Brisbane and major transport infrastructure continues to drive demand in the TradeCoast precinct,” he said.

The property comprises about 17,000sq m of warehouse and office space.

The property is 10km from the Brisbane CBD, adjacent to the Brisbane Airport, and has direct access to the Gateway Arterial Motorway.

Mr Ebert said there was an excellent opportunity for further expansion with only 36 per cent site coverage.