Sentinel records first “nil return” as retail trust winds up
Sentinel Property Group has sold the DFO Cairns shopping centre, with investors in the holding trust losing about $29 million.
The Westcourt asset traded for $36.65m, below the $39.7m group paid in 2016.
The buyer has not been disclosed.
The property was held in a single-asset trust comprising private investors, many of whom contributed a minimum of $500,000.
The asset manager then spent heavily on the DFOOD precinct and tenancy reconfigurations, like adding a World Gym and medical suites.
Proceeds from the sale will be absorbed by debt, leaving no return to equity holders in the Sentinel DFO Cairns Trust
The manager said the result marked the first time one of its trusts had delivered a nil return to investors.
“The decision by a minority of investors not to extend the Trust forced the sale,” a statement to unitholders said (continues below).
“This is the first time in SPG’s 16-year history that a Trust has delivered a nil exit value and we are extremely disappointed by this outcome,” it added.
“As co-investors in this Trust we acknowledge and understand the impact of this capital loss to all unitholders,” it continued.
Forgettable deal
The disposal followed a decision by some investors not to extend the trust or inject further capital after several years without distributions.
At acquisition, Sentinel had forecast strong performance for the outlet centre, citing growth potential and targeting double-digit annual returns.
DFO Cairns, about three kilometres south-west of the CBD, the only direct factory outlet centre in north Queensland, is anchored by Coles.
Subscribe to our newsletter at the bottom of this page.
