Sentinel sells Ipswich large-format centre for $36.25m as sector continues to perform

January 22, 2018

Chris Herde | Courier Mail

And Sentinel Property Group managing director Warren Ebert said investors seeking to park their cash into quality property assets nowadays should be prepared to pay a premium.

“In many areas it’s a sellers market. I believe prime retail peaked six to nine months ago,” he said. “For us there’s still good value in selling because we bought so early.”

The syndicator this week completed the sale of a fully-leased large format retail asset at 339 Brisbane St, Ipswich, to fund manager Primewest for $36.25 million in a deal struck by JLL’s Jacob Swan and Sam Hatcher.

Ipswich Homebase was purchased by Sentinel in February, 2013, for $23.5 million, and the sale realised an internal rate of return of 26.76 per cent for the Sentinel Ipswich Homemaker Trust.

On a 2.68ha site with a gross lettable area of 12,903sq m, it has 10 tenancies including Fantastic Furniture, Spotlight, Forty Winks, Chemist Warehouse, T.K. Maxx and IGA supermarket.

At the same time Primewest also bought Sentinel’s Dandenong Home Quarter in Melbourne’s south east for $32.5 million and the syndicator sold Nowra House & Home in southern NSW to a private investor for $20.3 million, ensuring tidy profits for both assets.

Mr Ebert said there was plenty of cash in the system and the Australian property market should continue to power along in 2018.

However, he said cashed up private investors, Real Estate Investment Trusts, fund managers, syndicators and other wanting to invest in premium retail, office and industrial investors will have to accept increasingly tighter yields or look to secondary stock, especially in the regions.

“We’ll continue doing what we’re doing. We’re looking at regional assets and have been buying in Mackay and Townsville,” he said.

“But I believe there may be some yield tightening, although prime assets can’t tighten much more.

“So what then happens is you start looking at the secondary offices, the secondary shopping centres and the secondary industrial and when those yields tighten too much that’s when you know the game’s up.”