ACT News


Fresh bid to sell prime land in subdued market

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Two prime car park sites on London Circuit will be re-released for sale later this year as the ACT government tries to breathe life into a becalmed property sector.

Offered for auction in mid-2010 as sensational and the city's ultimate address, both parcels of land, with approval for a hotel, failed to meet their reserve price.

Colliers International ACT chief executive Paul Powderly said the sites would be released again on a date yet to be fixed with fewer off-site requirements than the previous sale conditions, which would make them more saleable.

Mr Powderly said sentiment in the property sector had suffered from speculation over cuts to the Commonwealth public service, but people were reading too much into what was happening.

Instead of massed sackings, public servants would leave with voluntary redundancy payouts more likely to stimulate, not hurt, the local economy.

''There's 20-odd million people in Australia, you need 200,000 public servants to service them. We have currently got 205,000 across Australia, Canberra's got 60,000 of them, and in a week's time, or two weeks' time, we will have 58,500 of them and the rest of the country will have 200,000 and the rest will be walking around with (redundancy) cheques.''


Senior bureaucrats were reluctant to commit to new buildings in the tight fiscal climate, but this would not stop major projects such as the redevelopment of the Myuna complex on Northbourne Avenue and mixed-use development at the Canberra Centre from happening.

''Most of these new office deals have nothing to do with cutbacks,'' Mr Powderly said.

''They are Commonwealth departments in poor quality buildings, or in multiple buildings who need to be in one location.

''Whether or not you build them a 30,000 square metre building or 25,000 square metre building, they are going into a new building because they are going to save enormously on all the environmental issues with their site, save on security. … It certainly makes sense to go ahead and do it.''

Canberra developer Jure Domazet, of the Doma Group, said lack of confidence stemmed from global conditions and speculation of public service job cuts.

''The best analogy I have heard is if you sat down with 30 employees and told them that you are sacking one in six months time, you won't sap one person's confidence for six months, you will sap it from all 30. That's where we have been at for a while.''

Mr Domazet said new projects conceived in the current market in town centres were extremely rare.

He said the ACT government's offer of remissions for phasing in the new lease variation charge would not make redevelopments any more feasible.

Even on sites where there were no extra charges, bank requirements were often too onerous.

''The town centres generally have larger developments, so the number of sales required by the banks [before approving finance] is the same percentage as a smaller development but obviously a larger number, which is harder to achieve.''

The ACT Property Council will publish later this week a report it commissioned from specialist consultants Allen Consulting Group into the lease variation charge's impact on the property sector.

Industry groups will pressure the ACT government ahead of its budget for incentives to drive more activity in the sector.