Divestments to fund Harbour infrastructure works
Important infrastructure upgrades along the Sydney Harbour foreshore are a step closer after the NSW Government today announced a plan to sell the revenue streams to the ground lease rental income at four Government-owned properties.
Property NSW CEO, Brett Newman, said the Government plans to sell the ground lease rental income for the Novotel Rockford at Darling Harbour, the Holiday Inn Old Sydney in The Rocks, the Quay West Car Park and the Shangri-La Hotel in The Rocks.
“These transactions will enable us to unlock much needed funding to preserve and enhance our iconic foreshore, ensuring the millions of locals and tourists who visit these precincts each year enjoy a world-class experience,” Mr Newman said.
By selling the ground lease rental income for these four properties, the Government will receive an upfront payment to help fund important infrastructure work, while ensuring the properties remain in Government hands.
The plan to divest the ground lease rental income follows the announcement in 2015 that certain non-core commercial assets held by the Government would be considered for divestment.
The Government has previously entered into long-term lease arrangements with existing tenants at the four properties and the proposed divestment strategy will have no impact on existing lessees.
On expiry of the term to receive ground lease rental income by the successful purchaser(s), the rights to the ground lease rental income at the four properties will revert back to the Government.
Property NSW is managing the divestment, with Deloitte Real Estate engaged to provide due diligence, advisory and transaction services.
Property NSW will seek Expressions of Interest over the coming months.
In December 2016, the Government announced the divestment of the ground lease rental income at Darling Quarter for $191 million to help fund the new Circular Quay ferry wharves.
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