Unity Pacific buy favours Sentinel listing plans

July 13, 2016

Maggie Lu Yueyang and Robert Harley | The Australian                                         

Flamboyant Queensland funds manager Warren Ebert has finally managed to gain a major foothold in the Unity Pacific Group as he attempts a backdoor listing of his Sentinel Property Group.

The private company manages $1 billion of property across Australia and would sit alongside the likes of 360 Capital Property and Garda Capital if it lists on the Australian Stock Exchange. Sentinel yesterday boosted its 5 per cent state in Unity Pacific Group to 13.35 per cent, putting it on track to eventually take over the vehicle. After months of stalemate, Sentinel moved swiftly to secure its position, buying about three million shares at 41c last night.

Sentinel will be a serious player among the ranks of property funds managers. Mr Ebert, who frequently lashes more conservative investment houses for underperforming, has built a strong following of wealthy investors by buying unloved properties and turning them around. Sentinel now has about $1bn worth of assets under management including 45 retail, industrial and office assets.

It has flagged its interest in Unity Pacific for the past 12 months but it had been rebuffed as the target company called in corporate adviser InterFinancial to assess its alternatives. Just last month Unity Pacific said it would shift its focus to selling its corporate shell after wrapping up the $37.3 million sale of the last of its major properties in Brisbane. Mr Ebert has made no secret of his desire for control. He has long wanted to list his management company to provide himself with some liquidity and to help Sentinel advance the plans it has laid out to list its growing retail and industrial property funds.

Sentinel’s model is essentially buying up assets that institutions regard as too hard to fix and then repositioning them. The funds it assembles have performed well and the main potential candidate for listing is the growing Sentinel Countrywide Retail Trust, which would be a candidate to buy some non-core centres that Vicinity Centre is selling. Vicinity owns a portfolio or neighbourhood shopping centres, mainly in regional Australia, and offers a higher yield than rival vehicles. Sentinel is also building up an industrial fund, using the same counter-cyclical buying strategy, and its holdings may eventually be consolidated and packaged for an ASX listing.

Sentinel has also branched into buying large format retail centres and tourism assets, with Mr Ebert determined to shake up the property sector.