Why this property fund is investing $100m in Townsville
March 22, 2018
Tony Raggatt | Townsville Bulletin
A BRISBANE-based property fund is bullish about Townsville with plans to grow its investments here to more than $100 million.
Sentinel Property Group has also suggested the State Government’s “terrible” decision to block public funding to Adani’s Carmichael coal rail line might only be a short-term drag.
“There’s a saying in racing, that a champion will be a champion in spite of its trainer. Queensland will be a great place in spite of who is in power,” Sentinel managing director Warren Ebert said.
Mr Ebert and Sentinel’s chief marketing officer, Michael Sherlock, have been in the city this week to assess further investments and inspect improvements to its latest acquisition, the River Quays office building in Tomlins St.
Sentinel acquired the seven-level building, in which Adani is a tenant, late last year for $28.6 million and is investing a further $3 million in the building’s maintenance.
Sentinel’s North Queensland representative Michael Kopittke said local contractors were being employed to upgrade the property.
Mr Ebert said they were in due diligence with two more property acquisitions.
Subject to the assessments and finance, they expected to acquire an office building and an industrial property for a total of more than $25 million.
The fund already holds industrial property in Garbutt and retail assets in Deeragun.
“We think we will own $100 million in property in Townsville by June 30. That’s where we are heading,” Mr Ebert said.
“We are very bullish about North Queensland, particularly seeing what we are buying in Townsville.”
Mr Ebert said they were taking advantage of a market downturn and buying “in the gloom”.
Building prices were “way under” replacement cost, he said. “If you get a good quality office that you look after, you are in a tremendous position,” Mr Ebert said.
If anything, this was not well recognised by capital city bankers who tended to be swayed by negative stories and unaware unemployment in Mackay was 3.8 per cent.
“Townsville had a terrible run but things have gradually turned,” Mr Ebert said.
“The current Government (position) with Adani is a terrible situation … it’s difficult.”
But he believed the market bottomed last year and now was slowly picking up.
Sentinel has a national portfolio of more than 40 retail, industrial, office, land, tourism infrastructure and agribusiness assets with a total value in excess of $1.1 billion.