Sentinel Property Group has secured a commercial office building fully leased by the Queensland government in Mackay’s city centre for $3.5 million, with a highly competitive yield of more than 15 per cent.
The two-storey building with a net lettable area (NLA) of 2,031sq m on a 1,947sq m freehold site at 22-30 Wood Street, Mackay, will be added to the Sentinel Mackay Office Trust, which also includes “The HUB @ Greenfields” in Mount Pleasant, Mackay.
Sentinel Managing Director Warren Ebert said the property is 100 per cent leased to Queensland’s Department of Natural Resources and Mines, Department of Housing and Public Works and Department of Environment and Heritage Protection and was purchased with an initial passing yield of 15.08 per cent.
“The purchase price equates to approximately $1,725 per square metre of NLA, which is considered below building replacement cost, while the initial passing yield is well above yields of comparable assets,” he said.
“The property is located within the Mackay CBD, with good exposure to Wood Street, and the building has a 5 Star NABERS energy rating, which is typically a requirement of Government tenants. The property also provides 45 exclusive use car parks.”
Mr Ebert said Sentinel’s confidence in the regional economy was evidenced by its other industrial and retail investments in Mackay, and the Group is always looking for opportunities in Central and North Queensland.
“Mackay will benefit from more than $12 billion in current and future infrastructure investment in the region,” he said.
“According to the Mackay Regional Council, unemployment in the Mackay region fell to 2.6 per cent at the end of the June quarter 2018. It is well below the overall unemployment rate for Queensland. Specific to Mackay, an improved quantum of investment grade commercial property was transacted during the 2017/2018 financial year as investors seek relatively high returns in comparison to southern markets.
“The current low interest rate environment has increased investors search for yield and compressed yields for investment grade commercial property across regional Queensland.”
Established in 2010, Brisbane-based Sentinel has a total national portfolio of more than 40 retail, industrial, office, land, tourism infrastructure and agribusiness assets in Queensland, New South Wales, Victoria, Western Australia, the Australian Capital Territory and the Northern Territory with a total value in excess of $1.1 billion.
For more information on new Sentinel investment opportunities for high net worth and Self-Managed Super Fund (SMSF) investors, visit www.sentinelpg.com.au