Sentinel Keen to Follow Up $80m VIC Office Buys

February 6, 2024

Editorial Desk | The Urban Developer

Sentinel Property Group says it is in a mood to buy after beginning the year with the $80-million acquisition of two office buildings in the Melbourne CBD fringe.

Sentinel raised more than $50 million from investors to acquire the assets in Botanicca Corporate Park, Richmond, from ASX-listed GARDA Property Group, with a yield of 9.32 per cent.

The counter-cyclical purchase price was almost 33 per cent below replacement cost and a 39 per cent discount on the property’s April 2022 book value of $132 million.

The Botanicca assets will be held in a five-year close-ended trust.

Sentinel chief executive Warren Ebert said the non-listed real estate investment trust was aiming to pursue more office, retail and industrial assets.

“In 2024, we’re looking to be very aggressive as I think this year there’s going to be some fantastic buying, particularly in the office area,” he said.

The Botanicca acquisition, which settled this week, was Sentinel’s first foray into Melbourne since selling a CBD Bourke Street retail property for $33.96 million in 2017, which it had acquired for $20 million four years earlier.

The investor internal rate of return at the time was 33.1 per cent.

▲ Botanicca 9 was one of the two assets Sentinel scooped up in Richmond. The main image is Botanicca 7.

Sentinel picked up the Botanicca 7 and Botanicca 9 buildings in the Botanicca Corporate Park.

The buildings totalling 13,547sq m with 409 carparks are at 572 and 588A Swan Street, Richmond. The complex has a vacancy rate of 2.4 per cent.

Botanicca Corporate Park is the headquarters for many well-known companies, including Bunnings, Country Road, Opal, Siemens and Mitsubishi.

The capital raise for the Botanicca assets was more than $8 million over-subscribed.