A long-term Victorian government lease will underpin Castlerock Property’s $49.5-million office development on the former site of the Frankston International Hotel.
The Victorian fund manager won the tender to build the office block in the suburb, 41km south-east of Melbourne, where investment and development activity has picked up, including ground being broken in June on the $1.1-billion Frankston Hospital redevelopment.
Hank Bronts' Castlerock plans to build office space for more than 450 employees on the motel site at 383 Nepean Highway with the Victorian government committing to a long-term lease.
The offices will have end-of-trip facilities, 50 bike parking spaces, space for e-scooter parking and charging, locker rooms and showers.
The company in 2020 paid $12.5 million for 4640sq m of the 5500sq m site.
Construction on the site is expected to start in the first quarter of 2023 and end in mid-2024. It is expected to be completed in 2025.
The project is being run through a fund called Auslink Property Trust No 2 that has 13 properties worth $525 million in its portfolio and generates a 6.7 per cent return.
Castlerock has more than $700-million in managed assets, most of which are leased by state and Commonwealth governments.
The company has previously raised $90 million to buy an office building in Ipswich and also paid more than $57 million for a five-level office building in Wollongong’s CBD that the ATO has a long-term lease in.
The Victorian government is investing in offices in peri-urban and satellite cities for staff with Development Victoria delivering the $90-million GovHub in Bendigo.
