Setback for Goodman Group hopes for fast-tracked high-rise development in inner Sydney

The Goodman Group's hopes for quick approval for its inner-city Sydney residential high-rise development site have been stymied.

It had been among the landowners who’ve nominated their land for special consideration by the NSW Department of Planning, but instead its prior approval for massive intensification has been overturned by the NSW Planning Minister Brad Hazzard.

His decision limits the site to nine storeys, down from the 19 storeys granted by the former Labor state government.

“Labor directed the City of Sydney Council in 2010 to increase height limits at the site from nine to 19 storeys and increase allowable residential floor space by nearly 60%,” Hazzard says.

“Last week I toured the site and came to the conclusion that a height limit of 19 storeys at this site is completely out of character with the nearby area.”

Goodman’s specific intentions aren’t fully known or revealed in the landowner-nominated sites on the department’s websites but the decision has effectively halved any project with the difference amounting to 636 extra dwellings.

With each selling at, say, $700,000, about $445 million in potential revenue has been removed from the Goodman balance book. 

Goodman's holding includes a non-descript Erskineville industrial estate set on Mitchell Road between Erskineville Oval and Sydney Park, which has been the site of a long skirmish arising from the draft Sydney Local Environmental Plan.

The site was once headquarters of the Metters factory producing ovens and boilers. Its best-known brand was the 1930s Kooka range of gas cooking appliances.

It had an $81 million book value as at June.

Goodman’s other land holdings in South Sydney include its Alexandria industrial estate (pictured above).

The Metters site has long been subject to considerable government argy bargy as under the Keneally government, the NSW Planning Department demanded the City of Sydney double the site's permissible building heights.

Lord mayor Clover Moore and the council unsucessfully fought the push as they viewed it as a threat to Sydney City Council’s inner-city villages policy.

Other landlords viewed Goodman’s application as headlining a strategic battle that will shape future development density of all the industrial estates on the southern corridor from the city to the airport.

A lack of suitable transport infrastructure and seven day a week traffic congestion were factors in the minister's decision this week.

Lord Mayor Clover Moore recently previously said that Ashmore was the City’s second largest industrial area identified for urban renewal and offers a rare opportunity to create a sustainable new neighbourhood.

"We want to create a neighbourhood which includes the right infrastructure and sustainable design to improve the lives of current and future residents."

She said the City had been working with the community on the future redevelopment plans for the Ashmore precinct since 2007.

 "In 2010, the NSW Department of Planning and Infrastructure directed the City to increase the density of the proposed redevelopment and raise height limits of two towers to 19 storeys.

 “We were very concerned about the Department’s new plans and undertook technical studies which showed the heights and density proposed by the Department of Planning would cause overshadowing of nearby properties and obscure views from Sydney Park,” the Lord Mayor said.

 She said residents thought the development focused on profit rather than sustainable urban design.

 “We will be lobbying the NSW Government to support our proposal, reduce their increases to the density and height limits and increase trains and bus services to better serve the needs of the local community, now and into the future.”

The Metters factory site dates to 1906, when the firm, established on Rundle Street in Adelaide in 1891 by Frederick Metters, moved from its small factory on Alice Street at Newtown. Metters stayed there until the early 1970s, about the time it was taken over by Email.

Greg Goodman is the founder and chief executive of Goodman Group, which ranked as one of the global high-flyers of the real estate sector before the global financial crisis.

Goodman bought the site in 1989 from the NSW State Authorities Superannuation Board for $19.2 million.

At the time it has a net annual rental of $2 million, reflecting an initial yield of about 10%.

Goodman's general manager is former Wallaby Jason Little, who has been with the group since 2003.

The site's tenants include Toll Priority and Ausdoc.

The entire Ashmore precinct has been identified for urban renewal since 1998. It covers 17 hectares.

Much of it still contains large industrial buildings surrounded by terraces from the late 1800s. Recent redevelopment in the precinct includes the Motto, Glo and Star Printery apartment complexes, which are mostly six storeys.

Denis O'Neil's nearby Sydney Park Village complex, built in the late 1990s, is of a similar height.

Moore has previously indicated that over the past seven years the council has put in much time and resources planning for the precinct's redevelopment.

It proposed three tall buildings of nine storeys at the centre of the precinct, with smaller apartment blocks totalling 2240 dwellings and 4,000 people. The department wants 2,876 dwellings with 5,200 people.

Moore says the council's work included technical studies to look at issues such as stormwater management, traffic, and transport, urban design and economic feasibility.

Under the latest state government initiative, sites will be reviewed on the basis of government-endorsed objectives with each site undergoing an initial assessment of adequacy. Councils are expected to be consulted and their views taken into account as part of the evaluation. The appropriate provision of services and infrastructure will form part of the assessment process.

A review committee, chaired by the Director-General of the Department of Premier and Cabinet, will make recommendations to the state government.