Sentinel Pays $83m for Covid Response HQ
July 26, 2021
The Urban Developer | Phil Bartsch
A Canberra office building housing the control centre for Australia’s Covid-19 response is set to change hands in an $83-million deal.
The acquisition by Brisbane’s Sentinel Group is due to settle next week and will inject a second slice of the nation’s capital into the Brisbane-based fund manager’s portfolio.
Scarborough House, a 14-level A-grade office building in the Woden Town Centre, will be part of the Sentinel Regional Office Trust, which also holds assets in Townsville, Cairns, Brisbane, Darwin and Newcastle.
Sentinel also owns Tuggeranong Homeworld in Canberra’s south, which it purchased for $31 million in 2014.
It has secured Scarborough House on a 7.7 per cent yield from Centuria Capital. The building has a weighted average lease expiry by income of about four years.
The $83-million deal was negotiated through JLL’s Tim Mutton and Colliers International’s Paul Powderly.
The federal government-occupied property at 8 Atlantic Street, Phillip, comprises a net lettable area of 16,755sq m, which is fully leased and almost 100 per cent occupied by the Department of Health.
The building, which has 5-star Nabers Energy and 3.5-star Nabers Water ratings, underwent a base building upgrade and refurbishment in 2005 which brought the property up to a modern standard.
Sentinel executive chairman Warren Ebert said Scarborough House represented a highly desirable investment opportunity.
“Nationally, there continues to be strong investor demand for quality office assets, which has been driven by low interest rates and pent-up investor demand,” he said.
“The Canberra office market has seen robust positive net absorption tightening the vacancy rate to 7.6 per cent which is down from 8.2 per cent last quarter. This is the lowest headline vacancy figure in almost 12 years.”
Woden Town Centre is recognised as Australia’s public health hub and is surrounded by significant infrastructure projects, tenant amenities and public transport.
Sentinel Property Group, which was established in 2010, has a national portfolio of 59 retail, industrial, office, land, tourism infrastructure and agribusiness assets with a total value in excess of $1.2 billion.