City News

City acquires Customs House

Circular Quay, Sydney [showing wharves and Alfred Street buildings] Photo: Star Photo Co


The City of Sydney has purchased the heritage listed Customs House at Circular Quay from the Australian federal government, ensuring the popular building will remain in public hands. Located at the site where the First Fleet is thought to have arrived in 1788, it has been home to the Customs House for 174 years.

In announcing the City’s acquisition, Lord Mayor Clover Moore said, “It remains one of Sydney’s most iconic buildings, welcoming a million visitors through its doors each year. It’s a cultural centre, public library, exhibition space and provides commercial offices, cafes and space for events. It’s also home to an ever-evolving scale model of our city centre which is loved by children and visitors”.

Construction on the Customs House began in the 1840s during Australia’s first depression, providing much needed work for the fledgling penal colony. By the 1880s, as the colony boomed, the customs office outgrew its quarters and additions were made to the original Georgian building.

Original gateway for imports

City Historian Dr Lisa Murray said the building has had a rich history and served as the original gateway for imports into Sydney.

“The role of customs, powerfully symbolised by Customs House at Circular Quay, has always been a dual role of revenue raising through taxing trade, and protecting society from socially unacceptable goods, products, ideas and diseases.”

“In Sydney’s early days as a commercial centre, smugglers were active not only in relation to banned goods, but to any goods which attracted a significant tariff. Opium for instance was legal until well into the 20th century, but attracted a high tax, so it was at the centre of many smuggling scandals,” Dr Murray said.

Until 1990, the building was home to the Australian Customs and Border Protection Service. In 1994, the building was transferred to the City of Sydney under a 60-year lease and the building was substantially renovated.

In 2004, further renovations were undertaken and a City Library was added. Today, the site boasts meeting rooms, offices, a model of the City’s CBD at the ground level and the popular Café of Sydney on the top level.

In December 2018, the share workspace providers Hub Australia entered into a ten-year lease for the building’s third and fourth levels. The company’s coworking conversion cost an estimated $4.5 million. They will provide flexible workspace across more than 2,000 square metres to accommodate 425 workers. Membership costs over $1,000 per desk per month. It is projected the co-work space will generate revenues in excess of $5 million per annum.

Council has not revealed how much rent Hub Australia is paying, but council documents show the sub-lease of levels three and four will “result in better rental return for the council” than the previous tenancy.

In December of last year, Council also committed an undisclosed sum to restore and reinforce the front of the building. According to Council documents tabled at a committee meeting, “The external façade has been shedding small pieces of sandstone, causing safety concerns”.

The Council acquisition of the Customs House ensures that the prime waterfront site – between the Opera House and the Harbour Bridge – will remain out of the hands of property developers for years to come. Sitting on an 1,800 square metre site, the building is located conveniently close to a train station and a ferry terminal.

The jewel in the crown

In recent years, private developers have begun spending an estimated $3.7 billion on new residential towers around Circular Quay. In addition, the State government has started making plans for a $2 billion upgrade of the Circular Quay wharves. With so much cash being splashed around the Quay, the City’s investment would appear to be fiscally prudent.

And yet the City has declined to reveal the building’s purchase price, claiming commercial-in-confidence considerations in transferring local government funds to the federal government.

The Australian Financial Review estimates that the Customs House would have cost $200 million, given the building’s size and location. In purchasing the jewel in the crown at Circular Quay, the City of Sydney adds Customs House to its long list of sizeable real estate holdings, making the Town Hall balance sheet the envy of local councils across the State.




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