Sentinel has $300m cash to splash for WA bargains
September 27, 2017
The straight-talking Sentinel Property Group managing director Warren Ebert has $300 million-plus burning a hole in his back pocket — with a hefty proportion earmarked for Perth.
Brisbane-based Mr Ebert, who was visiting WA last week to conduct due diligence on two properties, one retail, one industrial, said he wanted to get to know the Perth market better.
The $1.5 billion Sentinel Property Group has only two WA assets, the Geraldton Homemaker Centre bought for $27.3 million in 2015 and the Port Hedland Boulevard Shopping Centre, which it paid $17.5 million for last year.
Its $100 million-plus bid for an unnamed Perth office asset foundered last year when the vendor withdrew it from sale.
“We are looking at buying another two properties, spending $50 million in the Perth area,” Mr Ebert said. “We would like more assets in WA.
“We love to buy when it’s not a hugely compelling case. By the time it’s a hugely compelling case, it’s too late.”
The property investment firm’s $1.5 billion in assets include open-ended industrial, shopping centre, homemaker (large format retail) and regional office funds.
The office fund, started at zero in October, will have $300 million in assets by Christmas, Mr Ebert said, adding Sentinel had recently spent $100 million on Darwin office assets in an environment drowning in pessimism. It has also bought offices in Cairns, Townsville, Wollongong, Brisbane and Newcastle.
“We don’t run away from the fights, we run towards them,” he said. “We like to get into the middle of the action. It’s not about avoiding risk, it’s about pricing the risk.
“We have been a big buyer in the mining areas of Queensland, such as Emerald and Mackay. Times were terrible when we bought. Coal in central Queensland took longer to come back than I hoped but we have done very well.
“If a tenant can pay the rent when things are awful, when things come good … It’s not like buying in Syria or Iran. Perth’s going to come back, there’s no doubt.”
Mr Ebert said this calendar year Sentinel Property would realise $300 million in asset sales.
“So we are keen to reinvest that and more,” he said. “We will settle $150 million in assets between now and Christmas and could easily buy another couple for $100 million.”
He said the group was not wedded to geographic or sector asset allocations, preferring to seek value.
“If we could spend another $100 million to $200 million in the next six to 12 months in WA, that would be great. We would love to buy office space. We would like to buy with good tenants.
“We are not afraid of some vacancy. But there’s money in things that have been neglected, where the owners have got tired or run out of money,” he said. “We like to spend on tidying up and reinvigorating the tenancies.”