This article is from the Australian Property Journal archive
SENTINEL Property Group has taken advantage of the surge in industrial land values, netting a $40 million-plus profit from the sale of a waterfront bulk storage TradeCoast facility after less than five years of ownership.
The Pinkenba site, 69 Tingira Street, spans 14 hectares plus 1.5 hectares of seabed base and has sold for $89 million to metal and cloud infrastructure recycling company Sims Limited.
Sentinel bought the site in a leaseback arrangement with ASX-listed industrial chemical company Incitec Pivot Pty Ltd for $48.5 million in October of 2017, and held the property in its Sentinel Industrial Trust.
Incitec Pivot runs its fertiliser distribution centre from the site and leases about 11.5 hectares of the property. The facility has a wharf suitable for Handysize vessels with deadweight limit of 38,000 metric tons and rated for liquid and solid bulk products.
Brisbane’s industrial market has seen runaway value growth over the past six months alone. Brisbane’s building capital values saw a boost of 32% in that time, most pronounced in the TradeCoast – which incorporates the Port of Brisbane and Brisbane Airport – at 47% growth, while vacant land values shot up by 54%.
“While we were not a motivated seller, the industrial market was at the stage where the offers we were getting presented with were far too good to ignore,” said Sentinel CEO, Warren Ebert.
“With interest rates starting to move up, we have seen some buyers becoming cautious and vendors’ expectations have already started to adjust. This is a great time to be sitting on plenty of cash.”
The Pinkenba property has 26,676 sqm of buildings, including high clearance warehouses and four liquid storage tanks with an 11.94 megalitre product capacity.
Selling agent Toby Hundertmark from Savills said Sentinel “seized an excellent opportunity to sell the property to an owner occupier with strong sustainability credentials and a long-term vision, who will put the property to its highest and best use”.
Ebert said, “When we purchased this property, I was told we paid far too much and would never get our money back.
“At the time I thought 35 acres on the water with its own 38,000-ton wharf was a rare find, and this has proven to be the case.
“While Sentinel is both a seller and a buyer in the current market, the company will continue to aggressively pursue new acquisition opportunities that have not yet been identified by others and we have been particularly busy over the last six months.”
The Pinkenba site delivered an internal rate of return of greater than 20% for Sentinel investors.
