Castlerock pays record c$57m for Wollongong office

The seven year old Kembla Street office is majority leased to the Australian Taxation Office.

Two years after selling a Wollongong office for a town record high, Castlerock has set a new watermark buying back in.

The Melbourne based fund manager is paying more than $57 million on a 5.5 per cent passing yield for 45-53 Kembla Street – the 10th asset for its Auslink Property Trust 2 (APT2).

The seven year old 6761 square metre building, majority leased to the Australian Taxation Office with smaller spaces to ANZ, Australian Red Cross and a café, includes four storeys of commercial area, ground level retail and a 92-bay basement car park.

It sits on a 2675 sqm parcel.

Vendor, private consortium Black Opal Bay, was represented by Ben Mostyn and Tyler Talbot.

Their deal is the priciest for a Wollongong office since Castlerock collected $50.38m selling 90 Crown Street in late 2018.

Established in 2014, APT2 now controls assets worth about $307m and has a nine year Weighted Average Lease Expiry – or 7.2 years based on income (story continues below).

Auslink Property Trust 2

APT2 seeks state and federal government tenanted real estate, and to exist with less than 50pc debt.

It controls c45,360 sqm of lettable area, 98pc of which is occupied.

The Kembla St property is the fund’s first New South Wales acquisition; its other holdings are in Victoria, Queensland, Western Australia and Tasmania.

Castlerock business development director Adam Bronts said the deal is an excellent one for the trust.

“Our team worked diligently to secure the building in a very competitive market, and by successfully doing so, we have diversified the geographical and tenant mix of APT2,” the executive added.

The Wollongong investment includes four storeys of office space, ground level retail and 92-bay basement car park.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco