The property is the first located off the eastern states of Australia for Sentinel, which has a total portfolio of 35 retail, industrial, office and land assets in Queensland, New South Wales and Victoria.
It is also the second asset for the newly-launched Sentinel Homemaker (Open Ended) Trust, which recently settled its first acquisition, the Nowra House & Home centre in Nowra, NSW.
The Geraldton acquisition continues Sentinel’s strong growth in the retail property sector, in particular large format homemaker centres and neighbourhood style shopping centres in key regional locations. Retail properties account for more than 50 per cent of Sentinel’s assets under management, which is closing in on a total value of $1 billion.
Sentinel has now settled six new retail acquisitions since June 30 2015, reinforcing its leading position among Australian fund managers in the retail property sector.
Warren Ebert, MD, Sentinel, said the company has been actively seeking the right asset to make its entry into the WA market, where it will continue to investigate further opportunities for expansion.
“Our first WA acquisition is in line with our proven buying and value-adding strategy of securing well-established retail centres, underpinned by major national retailers, in key regional hubs with multiple drivers of future economic growth,” he said.
“Geraldton is a strategic hub and major seaport for the mid-west of WA and has enjoyed 14 years of consecutive population growth. A traditional agricultural region, the diverse economy of greater Geraldton now also encompasses mining, fishing and tourism and has an estimated output of $5.072 billion. It is an important service and logistics centre for the region and is home to the largest wheat port in WA and the largest rock lobster processor in the world.”
“The Geraldton Homemaker Centre is ideally positioned to service the ongoing growth of this region given its strong national tenancy mix, high exposure position on the Northwest Coastal Highway and limited surrounding competition.”
“This acquisition demonstrates our confidence in the strength and continued growth of the Geraldton economy and its residential population, and the flow-on demand for large format homemaker retail shopping.”
Set on a 4.73ha site at 208-210 Northwest Coastal Highway at Geraldton, approximately 424km north of Perth, the Geraldton Homemaker Centre features a total lettable area of 15,949sqm, and on grade parking for 364 vehicles.
The centre opened in 2006, was extended in 2008 and again in 2011 to incorporate a McDonald’s store. It is dominated by national retailers such as Spotlight, Good Guys, Forty Winks, Barbecues Galore, Pet Barn, Godfreys, Repco, Supercheap Auto and McDonald’s.
Sentinel’s purchase of the Geraldton Homemaker Centre was negotiated by Philip Gartland of Stonebridge Property Group, and Simon Parsons of Parsons Hill Stenhouse.
The centre is now held as an asset of the Sentinel Homemaker (Open Ended) Trust, which has a forecast minimum investor distribution of 9.5 per cent (paid monthly and post interest rate/expenses contingency). The Sentinel Homemaker (Open Ended) Trust is a pooled property trust focussed on acquiring a national portfolio of large format retail bulky goods centres.
Following its first two acquisitions in Nowra and Geraldton, Ebert said the new Trust would continue to target further opportunities in this sector that meet its investment criteria.
Brisbane-based Sentinel consistently tops the PCA/IPD (Property Council of Australia/Investment Property Databank) index of best performing unlisted retail property funds on total return performance, having claimed the number one position 37 out of 43 months since the index was introduced. In the most recent index, it claimed the top three positions, and seven out of the top 10, for 12 month returns along with the top performer on a three year basis.
Sentinel’s unlisted property funds deliver an average net distribution across its entire portfolio of 12.00 per cent per annum, ranging from 9.50 per cent, to 16.32 per cent for individual Trusts. These distributions are paid monthly to investors purely from rental income from properties, with the majority of tenants in the ASX200. These monthly returns are further supplemented by special capital return payments on revaluations and capital growth returns on divestment.
In line with its commitment to active hands-on management, maximising the value of its assets and achieving the best possible result for investors, Sentinel has successfully sold three of its properties for internal rates of return ranging from 11 per cent to 30 per cent.