Council buildings once-in-a-lifetime real estate opportunity

15 May 2018

University students, tourists and members of the state's legal community are among potential future occupants of City Of Newcastle's two Civic administration buildings.

Council will seek interest in July in the sale or long-term lease of the City Administration Centre (CAC) and adjacent Fred Ash Building, ahead of its administrative staff's relocation to the West End next year.

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Submission for the sale or lease of either or both properties will be managed via an expression of interest (EOI) process, with a recommendation to be presented to Council in October.
 
"The future of these properties will be a turning point for what has long been considered the Civic precinct," Lord Mayor Nuatali Nelmes said.
 
"A more vibrant educational and cultural hub immediately opposite Civic Park, and across from the Art Gallery and Library, has long been part of the strategic plan for the city centre and will see students, academics, artists, thespians and tourists fill the space that has been occupied by Council employees for the past 40 years.
 
"It's been suggested that the Roundhouse building would make ideal student or academic accommodation, which would support the University of Newcastle's inner-city growth in both the Civic and Honeysuckle precincts.
 
"There's also been interest from the legal community in having more office space close to the Courthouse and from local architects intrigued by the CAC's brutalist design.
 
"The fact the two CBD buildings are adjacent, and will soon enjoy a light rail stop in front of them, make them a once-in-a-lifetime real estate opportunity. Both properties are also immediately across from the former Civic Station, which will soon become the main walk through from Hunter Street to Honeysuckle."
 
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Council CEO Jeremy Bath said developers had expressed interest in the Fred Ash Building, which has State heritage significance, as a potential boutique hotel.
 
"With the City’s tourism and business events market rapidly expanding ahead of the soon-to-be-completed light rail and cruise ship terminal, Newcastle is in urgent need of more hotel rooms," he said.
 
"I expect the properties will attract the interest of developers not just within Australia but also from overseas.
 
"The Fred Ash Building is perfect for a boutique hotel a la the Ovolo Woolloomooloo at Sydney’s historic Finger Wharf.
 
"It would make for a fantastic place to stay for those catching a show or exhibition, for travelling legal counsel or even for parents of children studying business or law at NeW Space."

Market valuations of both the CAC and Fred Ash Building will guide the EOI assessment.
 
The decision to test the market follows a Council resolution last October to consolidate staff in one building at 12 Stewart Avenue, Newcastle West, with the expectation of lifting productivity and enhancing collaboration among teams currently located in different buildings throughout the Civic precinct.
 
The Lord Mayor said Council's move west signalled the realisation of major long-term urban renewal plans. 
 
"Our move to the West End is a part of its rise as the city's new CBD, but that's only part of Newcastle's exciting revitalisation story. Like the west and Civic, Newcastle East is being re-invented as an entertainment, tourism and hospitality hub with major drawcards like Council's Bathers Way costal pathway set to rival any in Australia and a streetscape plan to complement the transformation of old office and retail buildings into apartments.
 
"In the Civic precinct, we continue to support the University of Newcastle's expansion and the delivery of an innovation hub to attract more students, researchers and entrepreneurs. And we are finalising public domain planning to provide new green space, cycleways and improved pedestrian links to connect across the new civic light rail stop.
 
"As our city transforms, the record investment we've seen in recent years will be seen as just the beginning of a historic decade of growth."
 
Council will appoint a real estate agent to market both Civic properties, progress the EOI process and manage all inquiries.
 
The CAC, which is known by multiple names including the Wedding Cake, the Roundhouse, the Champagne Cork and the Shuttlecock, has become an icon of the CBD skyline since it was opened in June 1977.
 
Built in the early 1900s, the Fred Ash Building is State Heritage listed for its Romanesque Façade and for its contributory element to Newcastle's distinctive 20th century landscape.
 

Building specs


City Administration Centre, 282 King St, Newcastle

Total net lettable are is 4,375.7 m2 over 8 levels + 55 car spaces

Lot size to be 1,358 m2

 

Fred Ash Building, 357 Hunter St, Newcastle

Total net lettable area is 1,271.2m2 over 4 levels + 1 loading area

Lot size to be 800m2.

Zoning for both is B3 - Commercial Core

Steps Council will now take are:
 
Complete the vendor due diligence on CAC and FAB May to July 2018
Tender the appointment of a real estate agent June 2018
Take the properties to the market via an EOI process July / August 2018
Assess the EOIs received September 2018
Confidential briefing to Councillors October 2018
Confidential report to Council for decision October 2018
Finalise a sale or lease late 2018
Settlement / vacant possession of buildings late 2019 / early 2020