Arrium has about 140hectares on the Hunter River upstream from the former BHP steelworks that once stood beside it.

The sale involved about 40 hectares of land holding four Arrium businesses: Metalcentre, AusTube Mills (formerly Tubemakers), Contistretch and Moly Cop Ropes.

Arrium sold the land on a lease-back basis, giving it a lease on the land for at least 12 years, with an option to extend.

Australia’s number-two steel-maker has struggled in recent years and the decision to put part of its Newcastle site to market was revealed in the Newcastle Herald last October.

Arrium’s iron ore business has also been hit by falling prices and the company share price has fallen from 33¢ last October to just 13¢ this week.

Following a report this week in the Australian Financial Review, an Arrium spokesperson confirmed the sale had been made to Sentinel Property Group, which runs property investment trusts out of Brisbane.

The AFR quoted Sentinel managing director Warren Ebert as saying the Newcastle property was the first asset for a new pooled trust, the Sentinel Industrial Trust, that would buy large industrial properties with development potential.

‘‘The property we have secured within the strategic Port of Newcastle precinct provides us with a prominent position and value-add opportunity,’’ Mr Ebert said.

He said the Sentinel site had 121,000square metres of buildings, but two-thirds of the land was vacant, giving it long-term development potential.

He said Sentinel had no problems raising money to buy the site.