Capitalising on Opportunities in the Industrial Sector

June 1, 2018

Sentinel has been both a buyer and seller of industrial property. Late last year we purchased a waterfront bulk storage facility at Pinkenba near Brisbane Airport for $48.5 million in a leaseback arrangement with global diversified industrial chemical company Incitec Pivot Pty Ltd.

This was a tremendous opportunity to acquire a major industrial facility in Pinkenba at a strong investment yield above what prime industrial assets are currently trading for, as well as benefitting from development upside.

The Pinkenba site offers unique ongoing investment potential with core bulk storage and liquid storage assets in low supply throughout Brisbane, particularly when coupled with direct river access.

Recent sales of industrial facilities have reflected yields in the range of 5.5 per cent to 7.5 per cent. This property was purchased at a passing net yield of 8.2 per cent.

Sentinel Property Group also sold a nearby warehouse/office facility at Banyo to BlueScope Distribution Pty Ltd on a long-term lease for $36.775 million. This particular transaction highlights Sentinel’s ability to buy and sell at the right time to deliver for our investors as we had acquired the Banyo asset in April, 2011, for $23 million.

The headline in the Australian Financial Review summed this up well: “Sentinel Gets Red Hot Deal in Bluescope Sale.”

Sentinel has started 2018 with the acquisition of a major industrial investment in Crestmead, south of Brisbane, for $9.6 million. The property is fully leased to a national manufacturing company.