Govt HQ fire-sale in limbo
The troubled fire-sale of the Weatherill Government’s State Administration Centre “headquarters” could be headed back to the drawing board, with industry insiders telling InDaily the long-planned sell-off has hit a roadblock.
The State Administration hub as depicted in the real estate listing. Source: http://www.commercialrealestate.com.au
The debt-reduction strategy has been underwhelming for the Government since it was first announced in December 2008.
At the time, it was expected to raise more than $400 million. But despite sweetening the deal by throwing in the nearby Flinders Street Education Department, Wakefield House and the Torrens Building university hub, the Government finally settled on a preferred bidder in July – for only $220 million.
Finance Mutual Australia managing director Jason Di Iulio was selected as the Government’s preferred bidder two months after expressions of interest closed in May.
But InDaily understands the deadline for negotiations expired last month, with the sale still not finalised. It’s understood that deadline has since been extended.
The Government would not detail the status of negotiations, but said it was “still in discussions with the preferred bidder for the sale of the State Administration precinct”.
“These discussions are commercial-in-confidence and at this stage the Government is unable to make any further comment,” a spokesman said.
Di Iulio said he could not comment, also citing commercial confidentiality.
Industry sources have cast doubt over the sale, with one telling InDaily the deal appeared to be off, and saying the Government was likely to go back to tender or revisit its shortlist from the initial expressions of interest.
But another insider insisted the deal was still alive, albeit a “very complex transaction”.
The precinct, which houses the offices of Premier Jay Weatherill and Treasurer Tom Koutsantonis, along with other senior ministers and bureaucrats, was billed as “one of the most significant property portfolios ever offered in the Adelaide Central Business District” when it finally hit the market earlier this year.
“Covering almost an entire city block, the State Administration Centre Precinct…provides purchasers with an opportunity to acquire a strategic, institutional investment grade property portfolio in the core of Adelaide’s Central Business District,” read the spiel.
“With a new 12-year lease plus two five-year options to the Government of South Australia over four of the buildings, the property provides significant passive income, with further development possible over a portion of the site.”
Koutsantonis told InDaily at the time the sale proceeds “will be used to reduce debt”.
