The Australian federal government is considering the sale of three military barracks, known as the Victorias, which could generate almost $1.3 billion in revenue. These prime real estate properties are located in Sydney, Melbourne, and Brisbane and are part of the Defence Department’s $30 billion property portfolio, which includes 70 major military bases.
An audit has been announced by Defence Minister Richard Marles to assess whether the department should sell a portion of its property portfolio, with a particular focus on bases in high-density urban areas. Raelene Lockhorst, deputy director of the Australia Strategic Policy Institute, highlighted that the valuation of Defence’s estate portfolio would be even higher if the properties were transformed into residential properties.
The Victoria Barracks in Sydney, sitting on 12.5 hectares of land, is valued at $875 million as residential property. The Melbourne and Brisbane Victoria Barracks are each valued at $200 million. HMAS Penguin, a 14.2-hectare site in Mosman, Sydney, has a residential land value of approximately $675 million.
The sale of Melbourne’s Victoria Barracks is already underway, with sources suggesting it could be completed within a year. However, divestments can sometimes take longer than anticipated due to unique circumstances and differing views of successive governments.
The federal government aims to complete the real estate audit by the end of 2023. However, there are concerns over the ambitious timeline and whether the audit’s terms of reference will consider the most efficient planning and delivery mechanisms.
Denita Wawn, the CEO of Master Builders Australia, has suggested that any assets sold should be designated for residential and commercial construction to alleviate Australia’s housing shortage. This approach would not only increase the value of the properties but also ensure the best return for taxpayers.
Past examples of Defence divestments have seen these properties transformed into residential or commercial assets, such as the Moorebank Intermodal Terminal, North Sydney residential development, and Canberra Airport Corporate Park.
Source: The Australian Financial Review, no URL available.