The council has gone out to tender seeking a real estate agent to sell 20 apartments above Café Troppo at 42-56 Whitmore Square.
The apartment block, designed by Troppo Architects and constructed in 2010, was built to increase affordable rental accommodation in Adelaide’s CBD and act as a pilot for environmentally-sustainable design.
Until recently, the apartments were leased at 75 per cent of the market rental rate as part of the Federal Government’s National Rental Affordability Scheme.
But a government decision to end that scheme in October last year meant the apartments have since been predominately leased by the council at market rental rates.
According to the tender documents, the council decided to offload the apartments following a review of its $300 million property portfolio.
The review identified 29 properties which could be sold to help the council recoup projected operating losses of almost $100 million over four years.
Profits from the sale of properties will go into a new “future fund” revenue stream.
The council has previously earmarked the imminent sale of the city beach volleyball site on the corner of Pirie and Frome Streets, as well as the adjoining Flinders-Pirie UPark building.
The Whitmore Square apartments will progressively come onto the market from mid-January once current fixed-term leases expire.
“Whilst Whitmore Square has been known for issues with anti-social behaviour, new residential developments are increasing the residential population around the Square and the refurbished Sparkke at the Whitmore hotel is a drawcard for visitors,” the tender documents state.
“Furthermore, the unique design features of the apartments owned by Council, including two-storey floor plans, polished concrete floors, relatively large outdoor spaces and accompanying basement care parking space, may contribute to saleability.”
The council will refurbish the apartments – four of which are already vacant – prior to sales.
It wants a real estate agent to sell “select vacant properties” as affordable housing priced below $422,050 through the State Government’s HomeSeeker SA website.
“Given the offering and current market values, it is anticipated that the apartments will primarily appeal to first home buyers, city professionals, investors, and students,” the tender documents state.
“The staged sale program will need to be designed to elicit the best value from apartment sales, encourage competition between buyers and minimise the time on the market for each apartment, within the limitations of the requirements for listing on HomeSeeker SA.”
The council’s city shaping director Tom McCready said in a statement to InDaily that the council was in discussions with Housing SA to sell some of the apartments as affordable housing.
“This will support the purchase of apartments by owner-occupiers who satisfy relevant income and assets thresholds and will prevent competition with investors,” he said.
“Council will continue to look for future affordable housing outcomes via facilitation and partnership arrangements.
“Examples of this approach include the provision of 15 per cent affordable housing incorporated into the Central Market Arcade and 88 O’Connell redevelopments.”
McCready said the council would initiate “close engagement” with current residents prior to selling the apartments.
CityMag first flagged the potential Whitmore Square apartment sale in April, revealing council members had been presented with the option to sell-down affordable housing assets as federal subsidies dried up.
Councillors discussed the sale of the Whitmore Square apartments in July behind closed doors, with the council at the time refusing to provide information to CityMag citing confidentiality.
McCready told InDaily this afternoon that the council endorsed the staged sale of the apartments on Tuesday November 9.
He said the decision remains in confidence.
Asked how much profit the council expected to gain from the sale, McCready said: “The current market value of each apartment has been assessed by an independent, qualified and licenced valuer”.
“The ultimate sales prices achieved will depend upon market conditions and the offers received.”
The Whitmore Square Eco-Housing building also comprises six privately-owned apartments, which will not be part of the council sale.
Local News Matters
Media diversity is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to guide it forward and you can help with a donation of any size to InDaily. Your contribution goes directly to helping our journalists uncover the facts. Please click below to help InDaily continue to uncover the facts.