Newcastle port to be sold off with boost to local infrastructure from proceeds ... - Property Observer

The 99-year Port of Newcastle leasehold is to be put on the block by the NSW Government with some $340 million of the proceeds going to revitalise central Newcastle.

The sale will provide funds to “turbo charge” the state government’s plans for Newcastle that were announced last year, the NSW treasurer Mike Baird said in the state budget today.

“This will provide a big opportunity, not just for the state but I think for Newcastle,” he said.

Property investors have taken a greater interest in the Newcastle district since plans were unveiled for a light rail connecting Wickham to the city centre replacing the current heavy rail service.

The opening of eight new connections to the harbour and a new Wickham transport interchange will be part of the plan.

The city centre of the country’s largest coal port will be reunited with the waterfront in an attempt to attract more business and visitors to the area, said Baird.

“In the 30 year period of the opening up of the Australian economy to international competition, perhaps no other city has been asked to make more painful adjustments than Newcastle. Today, Newcastle’s time has come.”

“Newcastle has been asked to make painful adjustments in recent decades, particularly as the city’s proud tradition of steel making came to a close…The city’s time has come,” he said.

The Newcastle Port project is expected to be worth about 700 million, Mr Baird said.

“But again, it is an unusual space we’re in where you have such a surge in superannuation funds looking for exactly this type of assets. Defensive assets is what super funds around the world are looking for so it is clearly a highly prized asset so that is the reason we have taken action today. We must act on that unique opportunity that sits there.

The pending sale of the port follows the March sale of Port Botany and Port Kembla in Sydney, the second busiest container port in the world, sold at about 25 times earnings.

The two ports were leased to NSW Ports Consortium for $5.07 billion, $4.31 billion for Port Botany and $760 million for Port Kembla.

The net proceeds of about $4.3 billion will be invested in Restart NSW, the state government’s infrastructure fund.

Newcastle also has plans for 6,000 additional homes by 2036 and 10,000 additional jobs under the city’s renewal strategy last year.

The lease sale is expected to be complete by mid 2014 after the undertaking of a scoping study.