Sydney Council to offload three depots amid big property selloff

Staff reporterJuly 27, 20170 min read

The City of Sydney plans to relinquish or realign management of some of its property portfolio to deliver more affordable housing across the inner city and boost Oxford Street as a major business destination.

A report to be considered by Council recommends the City place several surplus operational and commercial properties on the market in 2017–2018.

This will result in more affordable housing units across the inner city and enable the City to meet the objectives in its 10-year capital works plan.

A second report recommends the City appoint a commercial partner to reposition three strategically located commercial Oxford Street properties for long-term lease.

The reports come with the impending closure of three City depots at Zetland, Redfern and Alexandria in conjunction with the opening of a new major southern depot at Alexandra Canal.

Operational properties proposed to be placed on the market include:

  • 94–106 Epsom Rd, Zetland (Epsom Road Depot)
  • 11 Gibbons Street, Redfern (Redfern Depot)
  • 36 Gerard Street, Alexandria (Alexandria Depot).

If the report is adopted, the City will enter negotiations with affordable housing providers for the sale of the Redfern depot site, with the potential for more than 100 affordable housing units.

Commercial properties to be placed on the market include:

  • Stockton House, 73–75 William Street, East Sydney
  • 545–549 South Dowling Street, Moore Park
  • 90 Regent Street, Redfern.

Lord Mayor Clover Moore said commercial property was a major revenue stream, elevating the City to a strong, debt-free financial position.

“The strategic management of our property portfolio has enabled the City to provide some of the best parks, public spaces, facilities, infrastructure, events and services of any local government area in Australia,” the Lord Mayor said.

“The sale of surplus operational and commercial land will enable us to further invest in our City’s future, while helping to provide affordable housing in Redfern, which is so urgently needed now.

“Our commercial property portfolio generates more than $63 million of rental revenue each year.

"We’re looking to increase that revenue further to help meet the demands of our booming population.

“The Redfern depot has been earmarked as an appropriate affordable housing site for some time.

"The sale of this property will provide more housing options for key workers such as teachers, nurses, police, firefighters and social workers.”

Proceeds from the sale of 545–549 South Dowling Street will be set aside in the community properties reserve, given the building’s origins as a community activity centre.

The proposal to identify a partner for a long-term lease on three Oxford Street properties comes following two unsolicited proposals in late 2016.

The properties – located at 56–76 Oxford Street, 82–106 Oxford Street and 110–122 Oxford Street (both above) – have a combined lettable area of more than 12,000 square metres.

“These properties are in a strategic location and have enormous potential, but they need significant capital investment that would place a huge strain on the City’s financial resources,” the Lord Mayor said.

“We have a great opportunity to explore alternative opportunities with the private sector and secure a long-term lease, similar to the arrangement we have with the QVB and the Capitol Theatre.

“Late last year, we received two unsolicited offers on this site and we are keen to explore these options and look at ways to further revitalise Oxford Street.

“The realignment of these properties could prove to be the catalyst for the transformation of Oxford Street.

“Oxford Street isn’t the CBD or a suburban shopping centre. It’s been home to an eclectic mix of unique and independent operators for decades.

"Although it needs a financial boost, it must maintain its authenticity.

“We’ve made great strides with our Oxford Street creative spaces program, where 22 cultural and creative businesses pay low rent to use our properties.

"A key objective of this report is to integrate these cultural spaces into a future redevelopment.

“We want to find a commercial partner that shares our vision for a modern Oxford Street, harnessing all the positive elements of the retail strip’s past and revitalising these spaces for an even brighter future.”

Staff reporter

Property Management
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