Decentralisation: put policy into practice in commercial property for public servants

‘30 minute cities’ have been much in the news lately – the idea being that, as Australia grows, we need to develop decentralised hubs where people can work, live and play without being forced to endure crushing commutes. 

In Sydney, the Greater Sydney Commission recently launched a vision of a ‘metropolis of three cities’ – Eastern Harbour City (the current CBD), the Central City (Parramatta and surrounds) and the ‘Western Parkland City’ (clustered around the Badgerys Creek Airport, Penrith and Campbelltown). 

In Melbourne, PWC has outlined a similar vision without specifying where the centres should be – other than to mention locations such as Fishermen’s Bend, Arden McCauley and Monash.

And, in Brisbane, Elton Consulting has run the ruler over two suburbs – Upper Mount Gravatt and Chermside – and modelled the potential savings when compared to a CBD location for a hypothetical building that would accommodate approximately 1800 government employees over 25 years. 

The arguments in favour of a ‘30 minute city’ as outlined by PWC for Melbourne could apply equally to other cities. These include improved liveability because of reduced commute times and traffic congestion, the potential for increased housing supply around key centres, productivity gains from more efficient transport and increasing sustainability of public infrastructure by increasing its use.

On Elton’s figures, taxpayers could also save $48 million on rent over a 25-year lease in a suburban hub as against the Brisbane CBD, and the community benefit in terms of less time spent travelling would total $94 million. 

The figures for other capital cities, locations and building types would vary – but the reality is that CBD rents are eye-wateringly higher than those in the suburbs.

If a business chooses to ‘wear’ that cost, fine. However, as taxpayers, there is a serious case to be made for government to put their ‘30 minute city’ policies into action by moving at least some departments away from CBDs and into the suburbs – and saving an absolute motza in the process.

Our company has a building in planning for one of the areas Elton examined, Upper Mount Gravatt, and we’ve done some modelling as part of our preparation and application for development approval.

On our particular project, we believe we can save taxpayers even more than Elton assumptions had predicted – $90 million over a 10-year lease. To put that in context, the savings could fund tuition for 3,365 nursing students, cover 2.48 million standard bulk-billed doctor consultations or pay the average annual salary of 1,400 teachers.

And that’s just for one office. Imagine the savings if further government departments – state and federal – moved out the CBD?

Modelling on our proposed building at 643 Kessels Rd by consultants Urbis puts ongoing direct and indirect economic benefits (gross value added) to the Queensland economy at more than half a billion a year once it the building is fully occupied, and $68.7 million during construction.

The project would also lead to the creation of 96 direct jobs during construction, and a further 347 indirect jobs. And, once complete, the project would deliver over 3,800 jobs – over 1,650 within the building directly and the remainder indirect.

The site is across the road from Westfield Garden City shopping centre, and has excellent access to public transport, cycle paths, plentiful parking and the Pacific Motorway.

As Elton’s modelling shows,  there are over 200,000 people (including children) living in close proximity to Upper Mount Gravatt – including almost 19,000 who are tertiary educated, meaning a big pool of quality potential employees close at hand.

If a government department were to move into our building, it would be a massive boost for the economy of Upper Mt Gravatt, and Queensland as a whole.

It could be a win-win-win, where Government lowers its cost base, the community gets local jobs and employees enjoy a conveniently-located, high-quality, brand new workspace. The masterplan also includes future development of a neighbouring mixed-use project earmarked for a hotel, childcare centre, cafes, gymnasium, medical centre and co-working office space. 

I think you’d struggle to argue that the CBD passes the pub test when you’ve got a building that’s every bit as good, if not better, at dramatically lower cost.

Shane Quinn is the CEO of Quintessential Equity, a diversified unlisted property group with a strong track record of successful building redevelopment, quality service to tenants and excellent returns to investors.