Newcastle City Council tests market on selling administration centre round house, Fred Ash building

Newcastle City Council is poised to sell or lease its City Administration Centre “round house” and the adjacent Fred Ash building.

Lord mayor Nuatali Nelmes said on Tuesday that deciding the future of the two buildings represented a “turning point” for the civic precinct.

"A more vibrant educational and cultural hub immediately opposite Civic Park, and across from the Art Gallery and Library, has long been part of the strategic plan for the city centre and will see students, academics, artists, thespians and tourists fill the space that for the past 40 years has been occupied by Council employees,” Cr Nelmes said in a written statement.

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The council announced late last year that it was moving its staff from the two buildings, City Hall and other nearby office accommodation to new digs in Stewart Avenue.

The Herald reported at the time that the council believed the CAC could become student accommodation and the Fred Ash building a boutique hotel.

Cr Nelmes reiterated this view on Tuesday but said the buildings had also attracted interest from legal and architectural firms.

“It’s been suggested that the Roundhouse building would make ideal student or academic accommodation, which would support the University of Newcastle’s inner-city growth in both the Civic and Honeysuckle precincts,” she said.

"There’s also been interest from the legal community in having more office space close to the Courthouse and from local architects intrigued by the CAC’s brutalist design.

“The fact the two CBD buildings are adjacent, and will soon enjoy a light rail stop in front of them, make them a once-in-a-lifetime real estate opportunity.”

The CAC’s circular shape could make it a tough sell, although the Herald understands the expressions-of-interest process in July and August will not stipulate whether the landmark building must be retained.

The Fred Ash building, however, is listed on the state heritage register and must be preserved. 

The nine-storey CAC sits on a site of 2500 square metres and has 4375 square metres of floor space. The narrow Fred Ash building occupies 493 square metres of land and has a floor area of 1271 square metres. 

It is understood some of the interested parties have proposed buying both buildings.

The council’s chief executive officer, Jeremy Bath, said developers had expressed interest in the Fred Ash building as a boutique hotel.

“Newcastle is in urgent need of more hotel rooms,” he said.

“I expect the properties will attract the interest of developers not just within Australia but also from overseas.

“The Fred Ash building is perfect for a boutique hotel a la the Ovolo Woolloomooloo at Sydney’s historic Finger Wharf.

“It would make for a fantastic place to stay for those catching a show or exhibition, for travelling legal counsel or even for parents of children studying business or law at NeW Space.”

The council has laid out a timetable for deciding the future of the buildings which includes choosing a real estate agent in June, the EOI phase in July and August, a confidential briefing and report for councillors in October and finalising the sale or lease late in the year.

Council staff would move out in late 2019 or early 2020.

Colliers International agent Peter Macadam, asked about the council’s intention to move at a Property Council lunch in March, said it made sense for businesses “from a cash-flow perspective” to get their properties “off their balance sheet and not have to pay for maintenance costs”.

He doubted the CAC would be used for commercial purposes after the council moved out, saying the building was “too inefficient”.

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