Sentinel secures another Darwin office asset

October 18, 2017

Sentinel Property Group has made another foray into the Northern Territory with the acquisition of a commercial office building investment 3km north of the Darwin CBD for $9,347,510.

Sentinel has purchased the fully leased Arnhemica House property at 16 Parap Road, Darwin, as the latest asset for its Sentinel Regional Office Trust, which has now acquired seven properties nationally for a total of more than $200 million.

Built in 2011, Arnhemica House is the Sentinel Regional Office Trust’s third acquisition in Darwin over the past 12 months with the Group spending more than $100 million in the NT capital.

The Arnhemica House acquisition follows the purchase of premium-grade commercial office building, Jacana House, in the Darwin CBD for $60.75 million in June, 2017, and the ‘CasCom’ business park in Casuarina which Sentinel purchased for $34 million in December 2016.

Warren Ebert, Sentinel Managing Director, said Arnhemica House is a high-quality addition to the company’s growing office portfolio, with the building fully leased to the NT government until 2026 with two further five-year options, resulting in a WALE of 8.77 years by income.

“Sentinel has identified the opportunity to purchase this property at a passing initial yield of 9.0 per cent, delivering returns significantly above recent transactional evidence with national sales of CBD commercial buildings recently reflecting yields of sub 6.0 per cent,” he said.

Mr Ebert said Sentinel has identified Darwin as a strategic growth market with the city’s population increasing by almost 20 per cent over the past five years.

“Darwin is currently benefitting from extensive private and public investment aimed at capitalising on the region’s key advantages, in particular, its proximity and access to the powerful economies of Asia,” he said.

“This includes the federally funded $5 billion North Australia Infrastructure Facility, in concessional loans, to encourage private and public development of major infrastructure in Northern Australia, which has attracted major firms, such as the likes of Ernst & Young, to open offices in the city.

“The US Navy is also increasing its presence in Darwin, with 2500 personnel expected to be stationed at the Robertson Barracks by 2020.”

The Arnhemica House property has a net lettable area of approximately 2200 sqm and is 3km north of the Darwin CBD and close to a range of amenities and services.

The building features a newly installed 99.76 kilowatt solar power system which is expected to provide a 5.5 star NABERS Energy rating.

Arnhemica House joins six other assets of the open-ended pooled Sentinel Regional Office Trust: the CasCom Centre in Casuarina, Jacana House, Darwin, 200 Creek Street in Brisbane, an office property in Port Macquarie NSW, an office and car park facility in Newcastle NSW, and a recently acquired office building in Cairns.

The Sentinel Regional Office Trust has a current net distribution of 9.50% pa (paid monthly).

Mr Ebert said Sentinel will continue to investigate new office acquisitions for the Sentinel Regional Office Trust, targeting diversity of income both geographically and by tenant.

“We are an active buyer in the market for properties aligned with our opportunistic investment criteria, particularly in strategic regional locations not yet fully identified by others,” he said.

Established in 2010, Brisbane-based Sentinel has a total national portfolio of more than 40 retail, industrial, office, land, tourism infrastructure and agribusiness assets in Queensland, New South Wales, Victoria, Western Australia, the Australian Capital Territory and the Northern Territory with a total value in excess of $1billion.

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