Project Overview
Client
Port Authority and Industrial Operator
Property Type
Strategic Port Infrastructure – Coal Export Terminal
Reason for Service
Independent rental determination and advisory for long-dated port lease renewal
Preston Rowe Paterson was jointly appointed by Port Kembla Port Corporation and Port Kembla Coal Terminal Limited to determine the ground rental payable under the renewal of two interrelated long-term leases comprising the Main Coal Terminal Lease and the Remedial Drainage Area Lease, together with appropriate escalation mechanisms.
The engagement involved a valuation led assessment of strategically significant port land supporting a nationally important bulk export facility, requiring a clear, defensible outcome aligned with lease requirements, statutory obligations, and market evidence.
Summary of Scope of Services
Our engagement involved:
- Detailed review of the lease documentation governing renewal, rental determination and escalation provisions;
- Analysis of the unimproved value of extensive port landholdings subject to lease;
- Assessment of market ground rental having regard to comparable port and coal terminal transactions;
- Consideration of lessee and lessor submissions on land use constraints, remediation obligations and port infrastructure characteristics;
- Determination of market-aligned escalation arrangements for the renewal term.
Asset Overview:
The Port Kembla Coal Terminal is a strategically significant bulk export facility located within the Inner Harbour at Port Kembla, New South Wales. The leased land comprises approximately 58 hectares across multiple allotments, including extensive hardstand areas, rail balloon loop access, conveyor corridors and easements benefiting two deep-water coal loading berths.
The terminal benefits from direct rail connectivity to coal-producing regions, road access to the port precinct, and dedicated berthing facilities capable of accommodating large bulk carriers. The site is zoned for working waterfront and port-related uses, restricting alternative uses but reinforcing its scarcity and strategic importance within the Illawarra port system.
Valuation Methodology
A valuation-led advisory framework was adopted, consistent with market practice for long-dated port and infrastructure leases:
- Interpretation of lease-specific directions to the determining valuer, including mandatory disregard of throughput, plant, equipment and improvements;
- Assessment of unimproved land value as required under the lease provisions;
Benchmarking against comparable port, coal loader and bulk handling site rentals in Port Kembla, Newcastle and other major Australian ports; - Differentiation between dry land, wet land and seabed easement components;
- Market testing of appropriate escalation mechanisms aligned with long-term infrastructure leases.
This engagement demonstrates Preston Rowe Paterson’s expertise in:
- Complex port and infrastructure assets;
- Long-dated leasehold interests with bespoke rental mechanisms;
- Independent determinations under contested or high-stakes lease renewal frameworks;
- Valuation-led advisory for government, semi-government and industrial clients.
Outcome
The determination resolved a critical lease renewal milestone for a nationally significant export facility, delivering certainty for both owner and operator and supporting the continued long-term operation of Port Kembla as a strategic bulk commodities port.
Approximately
58
hectares of strategically leased port land within the Port Kembla Inner Harbour
A total of
2
deep water coal loading berths supported by integrated rail and terminal infrastructure
A total of
2
interrelated long term leases assessed as part of the independent rental determination
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