Sentinel Property Group has sold an industrial site in Crestmead, south of Brisbane, where it developed a facility for manufacturing company Oxworks, for $15.496 million.
Despite an uncertain property market, it's the second transaction in as many weeks for the Brisbane-based group which recently purchased two tenanted facilities in Mackay for $12.77 million to add to its $270 million industrial portfolio.
Sentinel had secured the vacant 16,790sq m site at 102-108 Magnesium Drive, Crestmead, in April 2019, for $2.9 million, then entered into a design and construct agreement with Oxworks for its new headquarters.
The new facility comprises a 8,000sq m industrial warehouse with an attached 800sq m two-level office which is leased by Oxworks for an initial term of 10 years with two further five-year options.
Sentinel managing director Warren Ebert said the sale to a private buyer for a yield of 6.3 per cent showcased the group’s ability to add value to its properties.
The facility's Crestmead location—around 24km south of Brisbane's CBD, with access to south-east Queensland’s major arterial links—puts it among those well-placed to ride out the short-term uncertainty caused by the coronavirus pandemic.
A Colliers report on the industrial implications of Covid-19 said that the recent growth in demand for transport and logistics as well as the key role industrial property plays in keeping the basic day-to-day necessities of Australians in supply, are key factors which will see the sector through the months ahead.
Colliers industrial managing director Malcom Tyson said that fundamentals within the Australian industrial and logistics market remain favourable with several structural and cyclical changes playing into the hands of the sector.
“Bringing it back to basics, the key drivers of the industrial market in recent years have been population growth, infrastructure investment, growth in e-commerce and low cost of debt.
“Although population growth is expected to take a hit over the short term, as net overseas migration drops significantly off the back of travel restrictions and the closure of the Australian borders to non-citizens, the outlook for the other key drivers in the current environment remains unchanged.”
The e-commerce sector in particular continues to expand structurally, and the coronavirus outbreak is expected to result in a pick-up in online retail sales and subsequent demand for industrial space.
“With stores adjusting their hours and political leaders asking the public to stay home, the value of e-commerce has increased exponentially,” Colliers research associate director Luke Crawford said.
“Demand for large distribution and warehouse facilities is expected to continue its strong run over the past few years, particularly for last-mile locations; food companies, logistics companies, warehousing and to some extent manufacturing have shown how important they are in times of “social distancing” and keeping the supply chain open.”
In July 2019, Sentinel offloaded another Brisbane site, an industrial facility 11km east of the CBD in Hemmant for $17 million.
Established in 2010, Sentinel has a $1.15 billion portfolio of more than 50 retail, industrial, office, land, tourism infrastructure and agribusiness assets.
