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Sentinel Property Group has revamped its executive leadership structure as its looks to take advantage of any opportunities in the commercial real estate sector arising from the economic challenges of the COVID-19 pandemic.
Sentinel managing director and CEO Warren Ebert said with the Group also marking its 10th year of operations, the continued execution of its succession plan would coincide with the next phase of the non-listed real estate investment trust’s (REIT) growth.
"Many of our office, retail and industrial properties have a strong tenant base and provide us with a solid income stream, even in these challenging times," said Ebert who will become the group’s executive chairman and chief investment officer, effective from July 1, 2020.
Its chief operating officer (COO) Stacey Jones has been appointed CEO, effective from the same date.
Sentinel was established by Mr Ebert in 2010 when the commercial property market was still recovering from the global financial crisis.
Sentinel has since built a national portfolio of more than 50 retail, industrial, office, land, tourism infrastructure and agribusiness assets with a total value in excess of $1.13 billion.
“The Sentinel philosophy has been to see opportunity where others fear to tread and there were many instances post-GFC,” Mr Ebert said.
“How lucky are we to find ourselves with another opportunity to achieve more strong results for our highly valued investors.”
While Sentinel has still performed strongly since the COVID-19 outbreak, Mr Ebert said the strengthening of the management structure in line with the succession plan was timely with the impact on the economy prompting a review of the Group’s operations.
“This has been a good time to look at how we are doing things and I believe the move away from being CEO will allow me to step back and focus more on our investors, sales and acquisitions, leasing, value-add opportunities as well as Ebert family business,” he said.
“Our plan for Stacey to take on direct full-time responsibility for the management of the Sentinel office is timely: all staff are now all back to work full-time in our Brisbane CBD headquarters after mixing working from home with returning to the office two to three days a week.”
After almost a decade as a commercial property lawyer, Stacey Jones joined Sentinel in 2012 as an investor; her initial executive role was as General Counsel. She quickly moved to COO, where she demonstrated her leadership abilities and passion for the organisation. 
 
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j.ballantyne1990-6AQqhLzZaK

Leadership revamp for Sentinel

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Australand Property Group revealed this morning that it had received a takeover proposal from Stockland Group, but that it was dismissed by the board as an "incomplete" bid.
Last month, the diversified property group snapped up a 19.9% stake in Australand, in <a href="https://www.urban.com.au/expert-insights/investing/29486-stockland-swoop-on-australand-stake-in-possible-takeover-precursor&amp;sa=U&amp;ei=QkhXU-rKEIqbyATSkYGwAg&amp;ved=0CAkQFjAB&amp;client=internal-uds-cse&amp;usg=AFQjCNHfYwlNeM1K5dqzp9TnpaErV_aC9A" target="_blank">what was seen as a prelude to a full takeover bid</a>.
In a strongly worded statement, Australand said it had received an "unsolicited, indicative, non-binding and incomplete proposal" from Stockland to acquire the remaining shares it did not own.
The offer was an all-scrip offer of 1.111 Stockland securities for each Australand security. Based on Stockland’s closing price of $3.78 on 22 April 2014, Australand said it implied an offer price of $4.20 per Australand stapled security.
Australand said the board reviewed the proposal, in conjunction with its advisers, Fort Street Advisers, Macquarie Capital (Australia) Limited and King &amp; Wood Mallesons, but rejected it on the grounds that it "did not consider that the terms and conditions of the proposal are compelling, nor does it provide sufficient consideration to Australand security holders in the context of a change of control."
As part of its review process, the board took into account the outlook for the group, and noted that the offer also represented "a 1.9% discount to the Australand closing price of $4.28 on 22 April".
But Stockland defended its offer, saying it believed the current Australand trading price already reflected a "significant takeover premium to the price at which Australand would trade, absent Stockland's interest".
Stockland also said it believed there was "compelling strategic merit" in a combination of the two groups, with benefits for all stakeholders".
Stockland chief executive Mark Steinert warned Australand "if investor price expectations are too high, we will sell and realise a profit on out 19.9% holding."
"In this regard, we believe the 18% offer premium to ALZ's stated NTA is highly compelling.
"Given the terms outlined in the Proposal, the Board has determined not to provide Stockland with access to due diligence material and remains focussed on maximising security holder value," the company said. 
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kjiminez-eaYKfU7qd2

Australand dismiss Stockland's takeover attempt as "incomplete"

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Westfield Group has succumbed to shareholder pressure and announced it will be improving the terms of its proposed merger for Westfield Trust unit holders by $300 million.
Under the adjusted proposal, Westfield will reduce the net debt contributed by the group's Scentre Group - made up of the Australian and New Zealand businesses- by $300 million to $6.8 billion.
As a result, Scentre Group’s pro forma net assets, at 31 December 2013, will increase from $14,980 million ($2.82 per security) to $15,280 million ($2.88 per security).
Pro forma gearing will reduce to 37.3%. Slightly above Scentre's targeted range of between 30-35%.
Last December, Westfield proposed splitting up its $70 billion empire to create an international entity to be known as Westfield Corporation.  The rest of the business would be known as Scentre Group - to be made up of its local and New Zealand operations, along with the Westfield Retail Trust (WRT).
A number of WRT unit holders had reportedly expressed concerns about the price of the merger deal and the consensus was that proposal would be voted down at the extraordinary meeting in late May.  
Westfield Group chairman Mr Frank Lowy AC said: “We have met with key investors in both WDC and WRT, the overwhelming majority of whom support WDC’s strategy of restructuring along geographic lines and merging the Australia/NZ business with WRT". " In response to some concerns raised and in consultation with the independent directors of WRT, WDC has decided to improve the merger terms for WRT security holders.”
“The change improves the terms on which WRT security holders are gaining their ownership interest in WDC’s industry leading operating platform." At the same time, he said, the adjusted terms improved the financial position of Scentre Group by reducing its gearing ratio and enhancing its Funds from Operations (FFO).
The transaction is now expected to deliver a 6.6% accretion to WRT’s forecast 2014 FFO. 
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Westfield Group improves trust merger terms

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Westfield shareholders attending today's afternoon meeting to vote on the controversial corporate restructure of both shopping centre groups never got to vote.
Just before 4.30pm the final Westfield Retail Trust vote for Westfield’s restructure was deferred.
A possible fortnight timeline for another meeting has been outlined, Bloomberg reported. 
There had been a strong chance that the entire proposal was set to fail after the proxy vote came in at 74.1% to endorse the Scentre Group Merger proposal, given it was short of the 75% needed.
This morning’s meeting saw 97.2 per cent of shareholders vote in favour of the restructure which involves estimated $500 million transactional costs.
Since Westfield unveiled the restructure in early December there has been growing vocal opposition to the deal from Westfield Retail ­investors, who felt the price for the management platform was too high and the deal was inequitable for Westfield Retail security holders.
A few weeks ago Property Observer reported that <a href="/expert-insights/investing/31035-westfield-group-improves-trust-merger-terms" target="_blank">Westfield Group had succumbed to shareholder pressure</a> and announced it will be improving the terms of its proposed merger for Westfield Trust unit holders by $300 million.
<div title="Page 2">
The members of the Westfield Group Board attending today, included directors resident overseas - John McFarlane and Lord Peter Goldsmith from London, Roy Furman from New York and Peter Lowy from Los Angeles.
The Age columnist Malcolm Maiden reported the background to the deferral as being a consequence of Westfield Group chairman Frank Lowy's warning on Thursday morning that Westfield would independently split into separate Australian and international companies if the Westfield-managed Westfield Retail Trust voted down its more sweeping $70 billion restructure plan.
It allowed the Westfield Retail Trust chairman Dick Warburton to suspend WRT's meeting, in part, because the WRT board believed that Mr Lowy's warning was a ''material change''.
The Australian columnist John Durie told Ross Greenwood's Money News on 2GB that he expected the deferral will allow the Lowy's enough time to secure the final approval.
 
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jchancellor-FAypfDUnLy

Deferred, not defeated, the Lowy's retreat on Westfield restructure proposal

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Brisbane’s property syndicator Sentinel Property Group has expanded its range of investment products, launching a specialist mortgage financing venture for residential and commercial development projects through ‘Queen Street Invest’.
Created by Sentinel founder and CEO Warren Ebert, it is also jointly owned by Jim Cossart and Daniel Holden.
The new business looks to allow investors to participate in financing new development projects through passive equity products. This includes mezzanine debt, preferred equity and first mortgage secured loans, each of which will be a standalone closed end fund for just one project.
Clearly defined exit strategies and a six to 12 months pre-determined life span will be there for each fund.
Sentinel has a portfolio of 20 office, industrial and retail properties to a combined value of more than $400 million, and average net annual returns of 12.5%.
The minimum investment for Queen Street Invest will be $100,000. Mortgage finance products will be available from $1 million to $20 million in value.
“We believe that the timing is right for this type of investment product, with market activity and construction on the rise and limited competitors in this space,” said Ebert.
“Whilst Sentinel remains focused on our core property business, we understand that some investors have a need to allocate a percentage of their portfolio to shorter-term investments. This is where Queen Street Invest can provide balance and diversity of investment.”
Queen Street Invest currently has some financing deals under review in Queensland in the residential apartment and retail sectors. They will be looking at national opportunities.
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jduke-EHk3XBmHkn

Brisbane syndicator Sentinel Property Group expands to specialist financing venture for developments

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Stockland chief executive Mark Steinert has revealed that the diversified property group is well placed to deliver earning growth at the top end of its guidance.
Speaking to investors at its third quarter briefing, he said residential deposits for the year to date at 31 March 2014 were the strongest it had recorded for that period in four years.
As such, Stockland was well placed to achieve 6% EPS growth in FY14, at the top of its guidance range.
But in revealing the earnings upgrade, Steinert said the company stood firm on its proposed $2.5 billion takeover of Australand. 
“Today’s update clearly demonstrates that we are achieving strong organic growth and our business is well positioned to take advantage of improving economic conditions," said Steinert. 
Any transaction, he said, must be sustainably accretive to both earnings per security and enterprise value.
Earlier this month, Stockland launched a bid to buy the remaining shares it didn't own in Australand.
The offer was an all-scrip offer of 1.111 Stockland securities for each Australand security. Based on Stockland’s closing price of $3.78 on 22 April 2014, Australand said it implied an offer price of $4.20 per Australand stapled security.
But the Australand board rejected the bid as "incomplete" and not compelling. 
Justifying its proposal, Steinert said: “We believe the offer we presented to the Australand Board is highly compelling, representing a significant 21% premium to net tangible assets at the current Stockland security price."
“The combined group would have the largest active residential business and future pipeline in Australia, with leading capabilities across land subdivision and medium density development. It would also have the second largest Logistics and Business Parks portfolio with high quality assets and future reinvestment opportunities."
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Stockland well placed to deliver earning growth

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The global financial crisis (GFC) caused many investors to re-think their strategies and while property investors managed to protect themselves more than others, property funds require specific attention.
AMP Capital’s Mark Ferguson head of Australian listed real estate and Christopher Davitt fund manager, wholesale Australian property fund, recently identified their three post-GFC lessons that all investors considering parking their money into a property fund can consider.
The hunt for income is as relentless as ever, they noted, recently evidenced by <a href="/expert-insights/finance/31651-number-of-investment-property-loans-jumps-by-37-since-2010-roy-morgan" target="_blank">Roy Morgan’s stunning statistic of a recorded 37% uptick in investment property loans since 2010</a>, the current low interest rate environment and low bond yields, which contrasted with strong forecasts for Australian property, may cause this number to surge even higher.
<blockquote>
“Strong capital into the sector should translate into further price increases, which should support capital appreciation and grow future earnings over the long-term."
</blockquote>
In fact, they noted that they expect Australian property to continue providing strong, reliable income streams for investors, particularly as the appeal of property is based on the stability of income despite rises and falls in capital values.
The strength of rental agreements in maintaining yield is a very positive factor. "These are generally signed on a long-term basis, so the cash flow of rental income is 'locked in' for a predetermined period,” they explained.
"The housing story keeps improving on the back of lower interest rates and foreign investment,” they said, with <a href="/news/31623-urban-taskforce-warns-against-xenophobic-review-of-chinese-investment-by-federal-government" target="_blank">foreign investment so strong it has now attracted official scrutiny</a>.
"Housing approval rates are up and capital-city auction clearance rates remain elevated despite high-profile company closures and job losses.
“Strong capital into the sector should translate into further price increases, which should support capital appreciation and grow future earnings over the long term."
They provided three investing tips, re-enforcing the concept that property requires a long-term investment outcome focus.
<ol>
<li>
Ensure you conduct research. Look into a property fund's track record and "stick to fund managers with an established reputation and sound history". 
</li>
<li>
Check that the gearing levels are not too high. As some property funds look to borrowing capital as a necessity to boost their potential investment returns, which is a technique known as gearing, it's worth remembering that it magnifies the potential for both gains and losses. Everyone's comfort with this differs, so ensure that the gearing levels are not too high for your risk profile. 
</li>
<li>
Understand underlying risks. Each fund holds different investments that contain a different amount of risk, and you must be aware of the underlying risks of the fund you are considering. Be "mindful that funds investing in a single asset carry more risk than those that invest in a portfolio of properties". They also suggested that investors be wary of properties with complex business models where there is a cross-collateralisation of debt.</li>
</ol>
In the long-term future, AMP Capital predicts direct property and Australian listed property to deliver robust income returns.
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AMP Capital's three post-GFC property fund lessons

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Singapore’s sovereign wealth fund GIC has sold $505 million worth of shares in the property giant GPT Group.
The block trade was executed last night through UBS at $3.81 per security, representing a 2.7% discount to the earlier trading price.
The selldown accounts for just shy of 8% of the GPT share register.
The Singaporean pension fund secured its GPT shares during the global financial crisis, so will take an estimated $400 million profit.
GIC first bought a 12% stake in 2008 for as little as 60 cents a share.
The Singapore investor is expected to retain exchangeable securities in GPT.
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Singapore's GIC sells $505 million in shares in property giant GPT Group

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It's being called NSW’s great land bank rush. New data from Savills Australia showed that since 2009, more than 300 hectares of industrial land in Sydney's western precinct has been snapped up by developers and real estate investment trusts (REITs).
The great rush has seen Sydney’s industrial land banks total an estimated 1,100 hectares, the bulk of which (75%) is held in the western precinct. 
By Savills calculations the land take up in the western precinct (Eastern Creek, Erskine Park, Arndell Park, Wetherill Park, Smithfield, Yennora and Girraween) has been at over 63 hectares per year since 2009.
Pre-lease activity has accounted for about 40 hectares of land take up per year, with over 1,000,000 square metres of gross lettable area secured by tenants seeking new logistics style accommodation within this corridor. 
Houssam Yakzan of Savills Research said: “there is strong demand from all the current land bank owners in the western precinct to further increase their land holdings and for REITs that don’t have any land banks they will be aggressively seeking to purchase land to grow their development pipeline.”
“As land reserves diminish with each new development, industrial land is being hotly contested".
He also noted that there was an enormous weight of money for industrial property right now and if a fund wanted to grow, more than likely it would need to grow from organic origins – either develop speculatively or play the pre lease market on their large land banks.
With the current demand for sites in excess of 10 hectares, Yakzan believes land values will be enhanced in the short term and throughout 2014.
Values in late 2012 to early 2013, he said, sat at a rate of $200-$225 per square metre for these large sites which were serviced and benched lots.
It is now tipping rates to be revised to between $250-$275 per square metre.
Smaller sites of one hectare have already experienced an increase in value - from just under $300 in March 2013 to now averaging $325 per square metre. 
Photo courtesy of Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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REITs snap up over 300 hectares of western Sydney industrial land

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Stockland has upped its Australand offer to $4.35 per security.
<a href="/expert-insights/investing/30527-australand-dismiss-stockland-s-takeover-attempt-as-incomplete" target="_blank">Stockland’s first $2.4 billion offer in April</a> for the diversified property developer equated to around $4.20 a security, or around $2.5 billion. It was rejected by Australand. 
Stockland <a href="https://www.urban.com.au/expert-insights/investing/29486-stockland-swoop-on-australand-stake-in-possible-takeover-precursor&amp;sa=U&amp;ei=QkhXU-rKEIqbyATSkYGwAg&amp;ved=0CAkQFjAB&amp;client=internal-uds-cse&amp;usg=AFQjCNHfYwlNeM1K5dqzp9TnpaErV_aC9A" target="_blank">purchased a 19.9% stake in Australand</a> in March.
“This compelling final offer represents a substantial premium against a range of measures and would bring together two high calibre companies with complementary assets and cultures," the Stockland managing director, Mark Steinert, suggested.
"The combined group would be the leading residential developer in Australia, including medium density, the leading owner and manager of shopping centres in regional locations and a top two logistics and business park owner/developer.”
The latest proposal to Australand security holders reflects:
<ul>
<li>22.2% premium to Australand's NTA;</li>
<li>18.0% premium to the price at which CapitaLand sold (and institutional investors purchased) 20% of the outstanding securities on issue on 21 November 2013;</li>
<li>16.9% premium to the price at which CapitaLand sold (and institutional investors purchased) 23.4% of the outstanding securities on issue on 19 March 2014; and</li>
<li>A 12.1% premium to the volume weighted average price ('VWAP') of $3.88 for the three month period up to and including 18 March 2014, the day prior to Stockland acquiring an interest in 19.9% of Australand.</li>
</ul>
As an alternative form of consideration, Stockland is prepared to offer a reduced scrip ratio, together with a cash component up to an aggregate of $250 million, with the structure to be agreed with the Australand Board.
"We have made this final offer following dialogue with Australand," Mark Steinert said.
Stockland reconfirmed its <a href="/expert-insights/investing/30751-stockland-well-placed-to-deliver-earning-growth" target="_blank" style="line-height: 1.3em;">guidance of 6% EPS growth in FY14</a>, assuming there is no material decline in market conditions and targeted 5% annual average EPS growth through the cycle. 
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