The Royal Oak Office Unit Trust 1

The Royal Oak Office Unit Trust 1 acquired units in the asset-owning entity of 1 Cambridge Street, West Leederville — a four-level office building situated within the improving West Perth office precinct, on the doorstep of commuter infrastructure and with visibility to more than 157,000 vehicles daily from the Thomas and Loftus Street interchange and the Mitchell and Graham Farmer Freeways.

The strategy is a full building refurbishment ahead of taking the asset to market for lease: structural maintenance and fitout works targeted within nine months of settlement, with the maintenance program, leasing incentives and all fitout costs fully funded at acquisition.

Why the term was extended: the trust was established as a two-year fund and settled in July 2022. The asset was acquired at land value with a building in place, and Royal Oak undertook an extensive refurbishment and structural upgrade through COVID and one of the most challenging office markets in memory. Leasing has progressed floor by floor on improving terms but has taken longer than originally expected, and the asset's valuation has continued to appreciate. Unitholders — sophisticated, long-term capital groups — agreed to extend the trust's term to November 2028, so the asset can be realised at the most appropriate point in the cycle rather than sold into a soft market.

The building was acquired below replacement cost with high underlying land value — a capital-preservation-first entry into a precinct where quality refurbished space is scarce.

Capital works were designed to deliver a 40% improvement in building energy efficiency at completion. The building has achieved a 5.5-star NABERS energy rating and a 6-star NABERS water rating, both independently certified — positioning the asset for the tenants and valuations that increasingly follow green credentials.