Eleven years after then-Prime Minister Kevin Rudd identified Melbourne’s enormous former Maribyrnong explosives factory as a solution to help local housing unaffordability – the Department of Defence has listed the asset for sale.
The open-market campaign – which begins with a “market sounding” calling on parties to brainstorm with the federal government before an agent is appointed, and could take up to two years – has surprised some agents: the 127.7 hectare parcel, with picturesque frontage to the Maribyrnong River, is considered one of the country’s biggest and most strategic infill sites.
Some major brokers didn’t know the property, known as the Defence Maribyrnong Site, was listed for sale last week, until approached for this story.
Elsewhere in Melbourne, Defence has also listed a historic building at 310 St Kilda Road. This property, if sold to a developer who builds into the airspace – could rob million-dollar city views enjoyed from residents of the luxurious Melburnian development, next door. However, Defence has said the Victorian government has expressed an interest in the property, known as the Repatriation Building, and that discussions are underway for a possible off-market deal.
Urban renewal proposals for the Maribyrnong site are expected to contain apartments, shops, offices and public amenity, possibly a train station.
The site was used for 86 years until 1994 to manufacture explosives for bombs, mines, detonators and hand grenades. Contamination of the land is considered the site’s biggest issue for developers – and possibly, future residents.
The land, which the Department of Defence has been working on remediating for the past decade (but which the incoming owner is expected to complete), could deliver the government a windfall of between $200 million and $300 million in its current form, agency sources say.
Ten years ago, when high density development in the suburbs was less prevalent, agents speculated the remediated land could be worth about $200 million.
At about that time, it was requested the Department of Defence start justifying why it wanted to keep surplus land, then valued at about $6 billion. Housing affordability was a major issue then – which was coincidentally the start of the Global Financial Crisis.
Defence has been an active seller of land in Melbourne. Elsewhere in Maribyrnong, housing has recently replaced former government sites on Wests Road, and Gordon Street (now the Edgewater housing estate). In 2015, another historic site in the area known as Jacks Magazine, and which stored gunpowder, was starting to be considered for a commercial re-use.
Of the latest 128 hectare Cordite Avenue, Maribyrnong, listing, a joint statement from the Defence Minister Marise Payne, Minister for Urban Infrastructure and Cities Paul Fletcher and Assistant Minister to the Treasurer Michael Sukkar said: “This unique development opportunity will deliver housing, infrastructure and community facilities for the local community and people of Melbourne”.
“The sale process will begin with a market sounding stage designed to gather insights and feedback from the industry. The duration of the sale will be determined by this stage.”
According to the statement, “Defence said it is working collaboratively with the Victorian Planning Authority, the Environment Protection Authority Victoria and the City of Maribyrnong to achieve the best possible urban renewal outcomes for the site.
“The defence sale process and Victorian government’s planning process include continuous community engagement activities to obtain further input from the community about potential future uses of the site.”
Elsewhere in Melbourne, rumours have been circulating for years that another major infill site – the Carlton and United Breweries holding on the banks of the Yarra River in Abbotsford, could also hit the market. Its value was loosely speculated at about $100 million in 2008.