Annual Review 2015–16 Excellence in property and places for NSW Annual Reports Government Property NSW Dear Minister Letter of submission I am pleased to submit to you, for presentation to Parliament, an Annual Review of the activities of Property NSW for the period 1 July 2015 to 30 June 2016. Additionally, in accordance with the Annual Report (Statutory Bodies) Act 1984, I submit the Annual Reports and financial affairs of Government Property NSW, Sydney Harbour Foreshore Authority and NSW Teacher Housing Authority for the same period. Brett Newman Martin Hoffman Deputy Secretary Secretary Property NSW Department of Finance, Services and Innovation Property NSW Annual Review 2015–16 Front cover: Colonial Secretary’s building, Macquarie Street, Sydney. This page: The Goods Line, Darling Harbour © Florian Groehn. Contents Property NSW Annual Review Appendices 02 Foreword from our 14 Our services and 37 Appendix A Deputy Secretary divisions Government Property NSW • F inancial statements 04 Our role 20 Our people • Statutory information 05 Our organisation 23 Our performance 91 Appendix B Sydney Harbour 06 Our work 24 Performance overview Foreshore Authority • The Sandstones • Commercial • Financial statements • Gosford revitalisation • Retail and statutory information: • Millers Point • Waste Sydney Harbour • Integrated outsourced • Housing Foreshore Authority asset management • Financial • Financial statements: • Relocations to Luna Park Reserve Trust Western Sydney 30 Environment and • Flexible teacher sustainability 183 Appendix C accommodation Teacher Housing • The Goods Line Authority of NSW • Financial statements • Statutory information 246 Index Under clause 6 of Schedule 5 of the Waste Recycling and Processing Corporation (Authorised Transaction) Act 2010, the Treasurer has designated that Waste Assets Management Corporation’s Annual Report be included with the Department of Finance, Service and Innovation’s Annual Report. www.property.nsw.gov.auProperty NSW Annual Review 2015–16 Foreword from our Deputy Secretary On behalf of Property NSW, I’m delighted to report on our progress over the past 12 months, a period of significant progress for our agency. • Pipeline of projects – we have a pipeline of $2.3 billion worth of possible transactions over the financial years 2017–21. This is an estimate of the assets that we are currently reviewing and assessing Property NSW is the new brand name encompassing the in consultation with government 02 entities of Government Property NSW (GPNSW), Sydney agencies, including State Owned Harbour Foreshore Authority (SHFA), Teacher Housing Corporations and Public Trading Authority of NSW (THA) and Waste Assets Management Enterprises, which may be Corporation (WAMC). This rebranding is symbolic of the considered for sale, redevelopment evolution of GPNSW, which now encompasses a wider range improvement or continued of functions, including place making expertise as a result of occupation by government. the consolidation of SHFA functions, and the subsequent integration of NSW Public Works Facilities Management • Millers Point – our sales program and Valuation Services, formerly part of Land and Property has delivered $210 million to fund Information (LPI). new social housing dwellings across New South Wales. With a total of This evolution has enabled the coming together of tremendous 72 Millers Point properties sold skills and expertise, which build Property NSW’s capability this year, close to 600 new fit-for- as a property and place making specialist. This past year has purpose social housing dwellings seen us deliver an array of major projects and transactions have been funded to date. as well as drive tourism and economic development. This has been possible with our extensive experience across the • Gosford revitalisation – delivering property sector and heritage, enabling us to provide end-to- a plan to develop a vacant site end solutions for property portfolios and places. at 32 Mann Street, Gosford, to support the government’s Decade It has been a source of great pride that our group has of Decentralisation (DoD) policy managed to further its role as NSW Government’s trusted and to enable the relocation of advisor when it comes to driving reform and delivering over 300 Department of Finance, commercial and community best practice outcomes. Services and Innovation (DFSI) roles – contributing to the revitalisation of Property NSW owns and manages $3 billion worth of assets Gosford’s economy. across 1,800 sites, as well as managing over 1,300 leases for NSW Government agencies. • Decade of Decentralisation – we have continued to play a substantial Property NSW has delivered significant results in 2015/16. role in relocating public service Highlights include: jobs from the Sydney CBD to metropolitan and regional centres, in • Asset recycling – our Commercial Transactions and Major particular Western Sydney. We have Projects teams delivered 130 transactions worth $431.5 already delivered a reduction of over million, funding that will support the delivery of better 35,100m 2 of government Sydney infrastructure and services. These included the sale of CBD office space, against a target land at Stanhope Gardens for $31 million and a further 13 of 100,000m2 by 2021, and have surplus properties for $32.8 million for the Department of relocated more than 2,300 jobs out Education. of the CBD, with around 1,300 of Property NSW Annual Review 2015–16 Internal presentation from Deputy Secretary, Brett Newman those relocated to Western Sydney. • Property Portfolio Reporting We are currently undertaking a (PPR) – we developed an innovative leasing market search for up to online portfolio management portal, 55,000m2 of office accommodation improving the way our government in Western Sydney to accommodate clients manage their assets. PPR a number of government agencies enables agencies to access real- from 2019. time key metrics for their Property NSW managed property portfolio, 03 • The Sandstones – we continue resulting in improved decision- to support the adaptive reuse of making. heritage assets. Achievements this year include the sale, via long-term We have made significant progress over lease, of the Lands and Education the past 12 months, and our enhanced buildings on Bridge Street, Sydney, range of services are well placed to drive to Pontiac Land Group, for development and reform. redevelopment as a luxury boutique hotel, including their commitment to We recently developed a simplified undertake an estimated $300 million vision for our organisation: excellence of works. in property and places for NSW. • Property and facilities Our success is directly linked to the management – we awarded an support we receive from our key integrated outsourced property stakeholders, and I’d like to thank them asset management contract to for their contribution during a year of Jones Lang LaSalle. This new transition for our agency. contract will enable government to save close to $12 million over Finally, I’d like to acknowledge the the contract’s five year term by commitment of our people. I’d like to leveraging global best practice commend them for their resilience property service experience. over the past 12 months, and for their commitment in helping our agency • Place management – we achieve our vision. established a dedicated Place Management division, which It is with pleasure that I present our will become the model for other 2015/16 Annual Review and Annual jurisdictions across the state. Reports, and I look forward to Visitation to Darling Harbour remains delivering our strategic objectives steady, despite major redevelopment and capitalising on new opportunities within the precinct, on the back of over the coming year. a strong program of events and activations which have contributed to tourism and spend in the precinct. Brett Newman In The Rocks, major events like Deputy Secretary the Aroma Festival attracted more Property NSW than 100,000 people to the iconic precinct. Property NSW Annual Review 2015–16 Our role Property NSW manages the NSW Government’s Property NSW operates under the significant property portfolio and its places. Our focus following principal legislation: is on the strategic review, acquisition, divestment and • Government Property NSW Act 2006 greater utilisation of the government’s real property assets • Sydney Harbour Foreshore Authority and precincts, which results in better visitor experiences Act 1998 and services for the people of NSW. • Teacher Housing Authority Act 1975 • Waste Recycling and Processing Our assets comprise office buildings, significant heritage Corporation (Authorised Transaction) properties, non-commercial assets and land holdings, and Act 2010. many have been vested in Property NSW by other government agencies. Our organisation works closely with a range of government agencies, providing specialist industry knowledge, expertise and understanding of the unique requirements of government property management. 04 Our approach to management of government property generates whole-of-government savings, economic benefits, and sustainability. Property NSW Annual Review 2015–16 Our organisation This year has been one of significant change, with a complex Under the Government Property restructure that saw the consolidation of SHFA under Property NSW Act 2006, GPNSW is also NSW, along with GPNSW, THA and WAMC. required to report to the Treasurer on matters relating to the properties of After balance date government agencies, including advice From 1 July