Grander designs in estate sale

Adam Castelli acknowledges the decision to sell the Denmark property, which has been home to the family’s wine business and the scene of many happy memories, was not a typical business call.

“What we’re doing is actually not an easy decision for us,” he said in an interview with Business News.

“It’s something we don’t normally have with property.

“We don’t normally have these emotional attachments but this one here, we’ve had some very good family experiences.

“So a bit like selling a family home there’s some kind of emotional attachment.”

The outcome was complicated by two interwoven factors.

Firstly, at around 500,000 litres of production a year, Castelli Estate is the 13th biggest wine maker in the state, according to Data & Insights.

All its winemaking infrastructure is on the property, as well as vineyards.

Yet Castelli plans to retain the brand and expand its winemaking business.

Secondly, it has staff on site who are considered extended family, and who integrate the winery’s operations into the local community.

As the head of the Castelli Estate wine business as well as the family’s construction division, Mr Castelli was used to making hard choices without broad consultation, but in the case of what is called the Mount Shadforth property, he gathered the clan to determine what they would do.

The picturesque Mount Shadforth property has significant wine production capacity and a major hospitality venue.

The 55-hectare property has been something of a Castelli retreat for two decades, and the family had enjoyed entertaining friends and their relatives at the venue, including during concerts held there.

The Castellis acquired the property two decades ago when high-profile lawyer Rohan Skea’s risky business practices caught up with him.

A Peppermint Grove lawyer, Mr Skea was sentenced to six years’ jail in 2004 after pleading guilty to defrauding more than $13 million from finance companies, but not before spending a good portion on an exorbitant lifestyle.

Extensive works started at the Mount Shadforth property have yet to be completed.

Having bought with the intention of using their building skills to finish off the considerable investment already sunk into the property, the family could not find an operator who wanted to lease it when they were done.

“After about six months or so we decided, well, we’ll do this ourselves,” Mr Castelli said.

“We’ll open up the doors ourselves.

“We found some opportunity there with contract winemaking.

“We did that for the first season, and then following that we set up our own label.”

The family also continued to develop the site.

Now listed by Boutique Property and Advisory, the property includes a 120-capacity licensed restaurant, a cellar door, a 1,000 tonnes per annum capacity winery, and luxury accommodation.

But Mr Castelli believes the demands of such a business requires more hands-on attention than the family can give it, and greater opportunities lie in deploying capital in building and construction, as well expanding the wine brand.

Castelli Group’s headquarters sits on the top of a gentle rise on North Lake Road, Myaree, a block back from Leach Highway.

The wine business dominates the site, with a big warehouse and well-appointed tasting area.

However, that disguises the true extent of the family operations, with the office also home to both a construction arm led by Adam and an energy company run by his brother, Luca.

Founded in 2006, Advanced Energy Resources is an electricity retailer and owner and operator of renewable energy microgrids, including interests in the 2.4-megawatt Mt Barker wind farm, 4MW Port Gregory microgrid, 7MW Moora microgrid and other utility-scale solar and battery storage facilities in Western Australia.

Castelli Group’s roots lie in the success of family patriarch, Sam, as founding partner in United Construction (now a division of Cimic Group called UGL) along with John Rubino, John Trettel and Charlie Bontempo.

Sam Castelli left the company in 1997, following its 1994 stock market float, and subsequently created Castelli Group in 1999.

He can still be seen at the group’s headquarters but likes to keep a low profile.

Adam Castelli said he got his start in business in a short-lived joint venture in building with the Trettel family, which ended when his father had a health scare.

After a brief hiatus, the Castellis started out on their own, with the 2001 development of 1292 Hay Street in West Perth, a property they sold 20 years ago for $9.6 million.

That business formed the kernel of Castelli Group, which has grown to focus on a build-own-operate model in the showroom/warehouse and office/warehouse sectors, as well as having a commercial real estate arm.

The emergence of the energy business and the entry into wine in the mid-2000s proved to be a fortuitous diversification at the end of the decade when the GFC briefly put the brakes on building.

“We’re very fortunate that we weren’t affected [much] and that we could actually tread water for a couple of years,” Mr Castelli told Business News.

“I turned my focus towards wine to try and keep myself busy and saw there was an opportunity for the wines to grow as well.

“[One] of the great things about the group itself is that we’re so diverse you can take the opportunities as they present themselves, and it doesn’t have to be one industry or the other.”

Fast forward more than a decade and Castelli Group has gone full circle, back to its roots in real estate development and construction, which has grown significantly during the past two to three years.

“As a group of businesses we are going in a new direction,” Mr Castelli said.

“It’s more of a realignment with our core strengths and areas of interest than a restructure.

“After a lot of thought, I felt like now was the right time for me to focus my attention on our property business – which has been the key focus area over my career – and continue to grow the wine business in a new way, without the estate.”