An unsolicited offer has tipped fund manager Sentinel Property Group into selling a prime Bourke Street building occupied by Virgin Active for $33.96 million.
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Led by Warren Ebert, Sentinel's philosophy of buying at the right time, adding value and selling at the right time appears to have paid dividends - it purchased the property just four years ago for $20 million.
Sentinel received an off-market offer "too good to refuse" for the three levels of strata retail it owns in the former Hoyts Cinema Centre building at 140 Bourke Street, a spokesman said.
The property, leased to fitness centre Virgin Active, covers the basement, ground and upper ground floor of a 14 storey strata titled building designed by Peter Muller, an architect heavily influenced by the principles of Frank Lloyd Wright.
Sentinel purchased the asset in 2013 from a fund controlled by veteran Melbourne property player Michael Drapac who was at the tail end of a post-GFC selldown to redeploy capital to the recovering USA market.
Virgin's lease on the site runs until 2024 with two further five year options returning net annual rent of $1.7 million.
Sentinel estimated the sale would provide fund participants with a 33 per cent internal rate of return taking into account capital return and distributions.
The group has been actively recycling assets to take advantage of peaking market conditions.
This week it unleashed campaigns to sell two fully leased large format retail centres in Melbourne's Dandenong and in Nowra on the NSW south coast which could bring in more than $50 million to unit holders.
The Queensland-based syndicator has about $2 billion of commercial, retail and industrial assets under management across Australia. It was particularly active after the global financial crisis picking up unloved assets from weary investors.
Sentinel only acquired the Dandenong Home Quarter in Melbourne's southeast in May last year for just under $30 million.
It purchased the Nowra House & Home a few years earlier in 2015 for $15.3 million.
Their listing follows the midyear sale of three neighbourhood shopping centres in regional NSW for $44.5 million.
The three shopping centres, located at Rutherford, Gunnedah and Tanilba Bay, were anchored by Coles supermarkets on long-term leases and sold in one line.
Sentinel acquired the centres in 2014 for $36.1 million and said investors were set to get an internal rate of return around 20.46 per cent, a figure which included the capital return and distributions over the life of the fund.
