Brisbane-based Sentinel Property Group has bought an office in Palmerston, the Northern Territory’s second-largest city, for $8.8 million, reflecting a passing initial yield of 5.92%. 

The Herbarium Building at 4 Mansfield Street offered 1510 sqm of office space and temperature-controlled research accommodation on a 940 sqm site.  

The building holds an archive for 270,000 preserved botanical specimens, used for accurate classification and research into plants. 

The property is leased by the NT government until 2032 and has a weighted average lease expiry (WALE) of 10.2 years by income.  

The two-storey office was purchased from private investors through Nigel Sharp of NTC Property. 

The asset is part of the Sentinel Northern Australia Investment Fund, which also includes a cold storage facility at Wishart in Darwin and property in Mackay. 

“Sentinel have been highly active in Darwin over the past five years, and we think the Northern Territory has an enormous couple of decades ahead of it due to massive investment in defence infrastructure and resource projects,” Sentinel CEO Warren Ebert said.  

“There is very strong demand to purchase good quality, well-leased commercial property in the greater Darwin area. 

“Due to the growing demand for investment properties in the greater Darwin region, yields have compressed during 2020 and 2021 to as low as 5.30%.” 

The Palmerston office building is close to the $300 million Gateway Shopping Centre precinct which features national retailers such as Woolworths, Big W, Event Cinemas and more than 75 specialty stores. 

The deal comes after Sentinel completed its purchase of the Casuarina Square shopping centre in Darwin from GPT Group for about $400 million just weeks ago.  

 The deal, which was unveiled in October last year, was believed to be the largest single property transaction north of Brisbane, according to Sentinel. 

The shopping centre had more than 190 stores and retailers, including Kmart, Big W, Woolworths, Coles and Birch Carroll and Coyle Cinemas.