City of Newcastle has looked close to home for its latest strategic investment, purchasing a significant industrial property in Sandgate to augment its long-term financial plans.
The 8.64-hectare land holding is the first Newcastle property acquired under City of Newcastle's Future Fund, which was established to ensure it can meet the need for infrastructure and services across the city into the future.
Executive Director of Corporate Services and Chief Financial Officer David Clarke said the Future Fund enables City of Newcastle to diversify its revenue base to cater for both the growing population and aging assets.
"Ensuring the long-term sustainability of almost $3 billion worth of infrastructure we manage on behalf of the community is one of our key responsibilities," Mr Clarke said.
"As our infrastructure ages, the cost of maintaining and renewing these essential assets increases, which is why we proactively set aside funds each year to meet these future needs.
"Our Future Fund is a strategic initiative that enables us to invest our cash reserves into a diversified portfolio of property and commercial assets.
"This latest acquisition strengthens that portfolio and positions us to generate stable returns, protecting our financial position and ensuring we can continue to meet the needs of our growing community without putting extra pressure on rates."
The Rural Drive property includes two warehouses that have existing leases in place with a number of businesses, which will generate ongoing rental income for City of Newcastle.
Mr Clarke said City of Newcastle will also consider potential longer term uses for the site.
"This strategic purchase also presents an opportunity to explore its use in the years ahead," Mr Clarke said.
"We will undertake a master planning process on the site to determine the most suitable mix of operational and income producing uses.
"One future consideration could include building a new, more modern facility for our Works Depot, which currently sits within the footprint of the Broadmeadow Precinct Investigation Area.
"This master planning process will take some time and there is a lot to consider before any decision can be made at a later date."
The Sandgate purchase was vetted by the Future Fund Governance Committee in line with its adopted investment strategy before being approved by the elected Council.
The Committee's membership includes representatives of City of Newcastle and the elected Council, as well as two independent members with appropriate professional capabilities and an independent Chairperson.
It is the third property purchased under the Future Fund, with previous acquisitions including a Bunnings warehouse in Taree and a Wollongong medical centre.
