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.”