This article is from the Australian Property Journal archive
WARREN Ebert’s Sentinel Property Group has made its biggest-ever purchase, acquiring the fully leased Makerston House from Challenger for $103 million, taking Challenger’s total divestments in Brisbane in the past fortnight to over $250 million.
The modern tower at 30 Makerston Street has a net lettable area of 14,640 sqm across 14 levels with 179 car parking bays across five basement levels, and has a 5 Star NABERS Energy.
It traded at a net passing yield of 7.85% and with a 4.63 year weighted average lease expiry, leased to the Queensland Government as well as various state government corporate entities plus Secure Parking, with fixed annual rental reviews ranging between 3.5% and 4.0%.
Sentinel Property Group managing director Warren Ebert said Makerston House was superbly positioned in the Brisbane CBD’s “North Quarter” precinct, which is at the epicentre of some of the city’s multi-billion dollar infrastructure projects including the $5.4 billion Cross River Rail network and the $2.1 billion Brisbane Live precinct.
Makerston House is on a 1,796 sqm site opposite the Queensland Police Service headquarters and 50 metres from Roma Street train station, the only existing CBD station that will link to the Cross River Rail.
The asset will be the 10th held in the unlisted Sentinel Regional Office Trust, which since 2016 has collected properties in Brisbane, Darwin, Townsville, Cairns, Newcastle and the north coast NSW regional centre of Port Macquarie worth more than $350 million.
The trust also comprises 11 Argyle St, Newcastle, The CasCom Centre at Casuarina in Darwin, 200 Creek St, Brisbane, 8 Buller St, Port Macquarie, Jacana House and Arnhemica House in Darwin, 139 Grafton St, Cairns, and Central Plaza and River Quays in the Townsville CBD.
Established in 2010, Sentinel has a total national portfolio of more than 40 retail, industrial, office, land, tourism infrastructure and agribusiness assets more than $1.14 billion.
Its purchase follows Kyko Group paying $126.7 million for the A-grade 201 Charlotte Street office tower to Fortius Funds Management and two BlackRock-managed private funds one month ago.
Major tenants in the 13,291 sqm building include Anglo American Metallurgical Coal, the world’s third-largest metallurgical coal mining company. Currently 87% occupied, it traded at a 5.94% initial yield and with a five-year weight average lease expiry after Anglo’s recent recommitment to the property until 2028. More than $5 million in refurbishments have recently been made.
Brisbane office transaction volumes skyrocketed by 60% in 2018 to reach a decade-high $2.35 billion, on the back of rebounds in the resources and tourism sectors, strong interstate migration and $44 billion of public and private sector infrastructure projects have spurred a leasing market recovery and in turn investment in the Brisbane office market.
This year has also seen Quadra Pacific sell off a pair of CBD assets. Singaporean group ARA Asset Management picked up 133 Mary Street for $96.5 million, while Heitman LLC and Marquette Properties teamed up to purchase the 288 Edward Street tower for circa $115 million.
Meanwhile this is Challenger’s second major transaction in less than a fortnight after selling the Next Hotel and retail in Queen Street Mall to Melbourne’s Salter Brothers for $150 million.
Australian Property Journal
