Sunshine Shines for Sentinel

In one of the largest retail deals in Victoria this year and in the midst of COVID19, Sentinel Property Group has sold its bulky goods centre in Sunshine North for $39m

Sydney-based Assembly Funds Management acquired the 22,000sqm City West Centre at 484 Ballarat Road. Assembly was formed in August 2019 by Michael Gutman OBE, former board director, President and Global Chief Operating Officer of Westfield Corporation. The Lowy family-backed group has teamed up Cadence, run by Charlie Buxton of Melbourne’s Buxton family.

The centre, which is situated on a large 6.2ha land holding opposite Albion train station, contains four buildings containing a total of 24,885 square metres of retail space rented to 13 tenancies. Harvey Norman is the largest tenant, occupying approximately 30% of the centre and comprising approximately 41% of gross income. Other tenants include Furniture Galore, KFC and Beds and Dreams. Approximatley 20% of the Centre is currently vacant resulting in a low passing yield of just 5.1%. If fully leased, the purchase price would represent a yield of approximately 6.95%.

The deal was brokered by Stuart Taylor and Sam Hatcher from JLL.

The partners plan to revitalise the asset via a capital works program, a full rebranding and active management. The property is also zoned for high-density commercial and residential – development. The Harvey Norman lease is due to expire in October 2022 however it holds 3 x 5 year options potentially deferring the development potential of the site.

“We’re big believers in the ongoing growth of Melbourne’s west and in particular the outlook for Sunshine. The property is well positioned to take advantage of a number of these strong thematics playing out,” said Charlie Buxton, managing director of Cadence Property.

Sentinel paid $29.5 million for the asset in 2015.