by JOHN MOYLE
A stretch of real estate consisting of offices and shops along Oxford Street, Darlinghurst, looks set to undergo a major overhaul by developers as the City of Sydney Council is considering offering it to property and investment group Ashe Morgan.
This comes after a long, drawn out process beginning in early 2018, which saw over 100 developers and investors express interest in the 14, 508 square metres of real estate, known as the Darlinghurst Collective.
The prospective buyers have reportedly proposed a 99-year lease valued at around $100 million for the City of Sydney-owned Oxford Street properties, some of which are boarded up and derelict.
A City of Sydney spokesperson said “The City expects to make an announcement about the future of the properties on Oxford Street later this year.”
The properties, situated at 56-76, 82-106 and 110-122 Oxford Street, account for around 40 per cent of buildings on the northern side of the street between Whitlam Square and Taylor Square and once housed many shops and small businesses that gave Oxford Street its vitality and uniqueness.
Wayne Nicol from Sax Leather has been a tenant of the City of Sydney for around 20 years over which time he has often battled the City over lack of maintenance and other issues.
He was rather sanguine about the new lease when he said “It’s pretty disturbing when these properties are now out of the mix for 99 years. And if you start bringing in a private corporation with a profit motive, the few of us that are left are going to be wiped out.”
City of Sydney councillor Christine Forster was more upbeat when she said “I’m disappointed with how long the process has taken, especially considering that five years ago I suggested doing exactly what has now been decided upon.”
While the City of Sydney councillors contacted for this story praised the City’s staff for their work, there seemed to be a general consensus about the failings of the past City Projects and Property Department, and the Council’s current lack of transparency around its property dealings.
“They hide behind commercial in confidence whenever property deals or leases come up,” said one councillor who did not want to be named. “Commercially this makes sense in business but I don’t know if it makes sense in local government,” the councillor added.
Councillor Professor Kerryn Phelps agreed when she said “It’s like pulling teeth getting information as a councillor because there’s very, very little transparency.”
With the impending announcement waiting due diligence, the few tenants left in the buildings are uncertain about their futures, along with the un-named councillor, who said: “My concern is for some of the existing tenants being given a fair go and that some of the property be kept for peppercorn rents, and some of the tenants have not responded quickly enough.”
Like pulling teeth
Sax Leather’s Wayne Nicol, who does not have a lease, said: “One of the problems I would have with a lease is that it would activate land tax to the State Revenue Office because my building has never been full, and they weren’t giving leases as they wanted to keep the whole thing open to a potential partner.”
Another issue raised about the City of Sydney’s management of the properties was the conflicts around full rent paying tenants, such as Sax Leather, and the curated artistic tenants who were often on very low rents.
“Very low rents created a lot of hostility with people who had been long term tenants and were doing it tough,” Cr Phelps said.
At least one other City of Sydney councillor agrees.
“The City of Sydney is broadly opaque and the Clover policy of curating Oxford Street has been terrible,” said Councillor Craig Chung.
Ashe Morgan may want to do their own due diligence on what is left of this part of Oxford Street and the long list of disgruntled shop keepers it will have to deal with.
Other property movements in Oxford Street shows signs that the area is finally getting some attention.
While the Department of Justice said “There are no plans to sell Darlinghurst Courthouse,” the building that was once home to Coco Cubano has been bought by Malaysian group Citadan, which told City Hub that they were still deciding the future uses for the building.
Another recent sale is Central Element’s purchase of the long forlorn Academy Twin on the corner of Oxford and South Dowling with Tonkin Zulaikha Greer appointed as architects.