Newcastle – 95 Pacific Highway Charlestown

Renewal of high quality tenants, cladding upgrade and proactive management, resulting in outstanding returns


Newcastle, NSW





Original Strategy

95 Pacific Highway was acquired by Eagle Property Group in July 2015. This four level building is located in the heart of the Newcastle medical precinct.

At the time of purchase the building was tenanted by strong AAA tenants, Allianz Australia and PRP Diagnostic Imaging. 95 Pacific Highway was originally built as a facility for Allianz Australia’s national workers’ compensation call centre. It was constructed in 2009 and has one lift, sixty-two secure parking bays and a high-energy efficiency rating. In 2009 it was awarded the Commercial Building of the Year award (Landcom Lower Hunter)

The initial investment strategy was to maintain the high-quality tenant profile and take advantage of the strong growth expected in the area. The fund was expected to deliver an average annual distribution in excess of 9.50%. Effectively this was a yield play with high quality tenants.


The Journey

The key to success was to renegotiate a long term lease with Allianz Australia when the original lease terminated in March 2020. Eagle Property Group successfully renegotiated an extension of the Allianz Australia lease until February 2026, with an option to extend to 2032. This had a significant impact on the value of the building, and the managers believed that this was the optimum time to test the market. Their view was that there was no guarantee that Allianz Australia would exercise the option to extend up until 2032.

Along the journey the managers were notified that the building had potentially combustible cladding which needed to be replaced. Eagle Property Group undertook and managed a $2.1m project to replace the cladding and upgrade the building. The completion of this project became a conditional precedent for the sale of the building. This project was completed towards the end of February 2022 and the sale of the building was settled at the beginning of March 2022.

Investors received income distributions in excess of 10% for the duration of the fund. The income distributions together with the capital gain from the sale resulted in an IRR of 14.10% for the investors.

Our approach

The property must make sense. There needs to be a sensible plan to achieve the projected outcomes. If it has good bones, is in a great location, and has multiple options to achieve the requisite returns then we’re interested.

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© Eagle Property Group. ABN 9915 9438 623 All Rights Reserved. The references to ASIC and APRA above do not in any way intend to show or infer that Eagle Property Group has been endorsed, is associated with, or approved by either of these bodies. Eagle Property Group operates under Australian Financial Services Licence (AFSL) no. 402998. This AFSL is held by Crest Funds Management Pty Ltd, a company wholly owned by the shareholders of Eagle Property Group. By virtue of the AFSL, Eagle Property Group is regulated by the Australian Security and Investments Commission. Site made with love by Orange Bicycle