Adam Bronts

Castlerock, a premier property fund manager specialising in direct property social infrastructure, has successfully raised $35 million in capital. This achievement highlights that while opportunities may be limited, those with the knowledge and expertise can still find and capitalise on them. This capital raise, coupled with a ‘favourable’ rating from Australia’s esteemed investment research firm SQM Research, underscores the sector’s potential for long-term growth and investor confidence.

Adam Bronts, Director of Business Development at Castlerock, stated, “The recent $35 million capital raise reflects strong investor confidence in our strategic approach and the opportunities we continue to identify and capitalise on. These funds enable us to pursue acquisitions or developments of premium quality in trusted locations beyond the CBD.”

SQM Research noted in its report on the Castlerock Government Property Fund, “The robust approach applied to its research and portfolio construction, the stringent screening process for all State and Federal tenders, and the meticulous due diligence ensure the attractiveness of suburban and regional locations. As a result of Castlerock’s long-term stable investment philosophy, we have awarded the ‘favourable’ rating to highlight the rock-solid nature of the Fund, particularly in the current investment climate. There is also potential for the Fund to outperform over the medium-to-long term.”

Despite some negative sentiment surrounding office spaces, significant opportunities remain. Castlerock’s strategic focus on ‘beyond-CBD’ locations and partnerships with government tenants provides investors with a stable income stream, even during market volatility.

Castlerock’s investment strategy centres on the development and management of government-leased assets, targeting ‘sticky tenants’ in prime locations outside Australia’s CBDs. These locations are selected for their long-term tenancy stability.

The Government Property Fund offers investors a high-quality, diversified portfolio comprising 13 State and Commonwealth Government-leased assets across five states, with funds under management (FUM) totalling $526 million.

Currently, the Fund is closed, having successfully raised $35 million for the acquisition and development of new assets aimed at sustaining growth and diversification. It is scheduled to re-open in August 2024.

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The Castlerock Government Property Fund offers investors a high-quality diverse portfolio comprising 13 State and Commonwealth Government-leased assets spread across five states in Australia, the Fund boasts a weighted average lease expiry (WALE) of 5.9 years.

Since establishment in 2014, the Fund has consistently demonstrated financial strength with assets under management of $502 million and delivering a total return of 10.3 per cent since inception.

At the core of the Funds investment strategy is the steadfast focus on providing reliable income streams. This is underpinned by the 99 per cent occupancy rate, with key tenant income deriving from: Queensland Government (59,5 per cent), Commonwealth Government (9.0 per cent), Western Australian Government (13.5 per cent), Victorian Government (8.1 per cent) and Tasmanian Government (6.6 per cent)

Castlerock Director, Business Development, Adam Bronts said, “The Recommended rating comes at an opportune time for Castlerock as the Fund is currently open to new and existing investors through a $30 million capital raise.

As the Core Property report stated, our portfolio strategy “would appeal to investors who are seeking a highly secure income distribution with rental income, supported by a portfolio of long-term government tenancies.”

This capital raise will enable us to pursue future opportunities for acquisitions or developments of premium quality our investors have come to know and trust.

The Recommended rating and thorough framework and research methodology by Core Property reflects Castlerock’s strong parameters surrounding key factors of: product and underlying portfolio construction, strength and depth of management team, product structure, risk management and financial analysis.

Bronts concluded, “The Government Property Fund is currently completing a $60 million, five-level office building in the southern Melbourne suburb of Frankston, Victoria and leased to the Victorian State Government.

“The development is due for completion in March 2025.”

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