What are your thoughts on LVR?
September 2, 2016
Sentinel’s approach to debt has gone against the grain of conventional industry thinking as we have not shied away from working with higher gearing levels in order to deliver higher returns directly to investors.
Managing Director of Sentinel Property Group, Warren Ebert addressed the issue of high gearing at the recent Property Funds Association conference in a presentation titled ‘Debt, the ultimate disrupter?’ where he argued that cash flow from rents as well as interest cover are much more important considerations than gearing (Loan to Valuation Ratio) in any deal. His views on working with debt were reinforced by recent comments from Warren Buffett when interviewed on the US economy, he declared that: “debt can only be evaluated in relation to future income producing capability”.
Speaking of quotes from those who have made their way by challenging the status quo, Warren recently came across this great quote from Phil Knight, the co-founder of Nike, on the opening page of his memoir: “The cowards never started and the weak died along the way, that leaves us”. It may be harsh, but it is true.
Sentinel too is a disrupter that has built its success on forging a new way against the accepted norms in our industry. As you will often hear Warren say: “if you do what everybody else does, you end up where everybody else is.”
We are proud of what we have and will continue to achieve in consistently delivering unrivalled returns to our investors. We are a word-of-mouth business and we appreciate that the most powerful referrals come from our own happy investors.