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Property never sleeps

Although the economic shutdown in Melbourne has put a dampener on property transactions, the world continues outside Victoria, with several major transactions as we pass through September.

  • Specialist property fund manager Castlerock has added another key regional property to its Auslink Property Trust (No.2), spending more than $55 million to acquire the property at 45 Kembla Street, Wollongong. It beat Steel City’s previous record of $50.4 million for the sale of 90 Crown Street. The property has over 6,700 of lettable space and boasts a yield of 5.75%. Interestingly, the yield is in line with the valuation of many more cyclical and pandemic-exposed retail properties around Australia.

    The primary tenant is the Australian Tax Office, with ANZ and the Red Cross also occupying the building. The acquisition fits the group’s longer-term strategy, with CEO Hank Bronts stating, “this is an excellent acquisition for Castlerock, confirming our strategy to focus on property investments in government-tenanted buildings”. It becomes the tenth asset of the $300 million fund, which has a weighted average lease expiry (WALE) of over nine years.

    Over the ditch, Charter Hall Group (ASX: CHC) has announced the acquisition of a 49% interest in a $534 million portfolio of 70 service station properties in New Zealand. The properties are leased to BP with an average term of 20 years. The transaction occurred as part of a sale-and-lease-back deal under which the tenants agreed to extend their terms. The portfolio is diversified across the country, with 51% located in Auckland.

    The portfolio will be owned 50% by the Charter Hall Long WALE REIT (ASX: CLW) and the Charter Hall Retail REIT (ASX: CQR ), with an initial yield of 6.25%. The group’s CEO said: “This off-market transaction further extends our relationship with BP, builds on the success of our Australian partnership and demonstrates our conviction in triple-net-leased Long WALE convenience retail.”

    Staff Writer

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