Why NTG needs to cancel its EOI for New Office Accommodation



The Northern Territory Government (NTG)'s Expression of Interest (EOI) for new office accommodation for the Health Department has been shortlisted to three proponents.

The NTG has unexpectedly made the decision to proceed with the tender process, but to separate the Health Department into two roughly equal sizes in two locations, one being in Darwin and other in Palmerston. Northern Territory Executive Director Ruth Palmer said.

“The NTG’s decision for the Health Department EOI was and after today, even more flawed on many levels!

“The first flaw is that the original EOI Health Headquarters was primarily orchestrated to achieve synergies by consolidating the Department of Health’s various tenancies - located in Darwin and Casuarina into one geographic location.

"How this will be achieved by today’s decision is hard to logically understand.

“The second flaw is the NTG’s assumption that the Health Department EOI will achieve broader social and economic benefits.

"With current vacancy rates at unprecedented and rising levels within the Darwin City, the increase from this decision will only create more vacant and boarded up buildings, imagine the “old woollies site”, but on a larger scale throughout the city.

“The third flaw is based on the original concept of the idea. If the NTG wanted to provide stimulus to the construction industry workers they should have instead selected a project that would not have worsened the already historically high vacancy levels.

"There are currently many projects that meet this criteria, including finishing off the works for the Civic Precinct, proceeding with the new visual arts building, or any number of the proposal contained in the Darwin City Master Plan.

“Instead of a short term “sugar hit” to certain sectors of the economy, it would be nice for a change for the NTG to invest in iconic social and community infrastructure - which is desperately needed in the city, and will provide benefits for decades to come.

"As it currently stands, the only logical next step would is to cancel this EOI and start back at the drawing boards.

“We need to be smarter about how we invest in our cities. The office market is already significantly over-supplied.
"Forcing the construction of additional office space will not reduce operational costs for NTG.

"NTG would need to pay significantly more rent on any new office accommodation and forcing the construction of the additional office space, when there is no demand, will weaken an already-fragile commercial property market.

“Our CBD is not performing well. Our retailers are struggling.

"The residential and commercial property markets are struggling. Constructing new office accommodation will not fix our CBD.

"We need to make our CBD a more convenient and attractive place to work, live and play.

“This EOI needs to be cancelled.”

Top End Vacancy Rates:
● A Grade Office Vacancy Rates in the CBD already sit above 20%.
● A Grade Office Vacancy Rates in in the Top End are reaching close to 30%.
● Office Vacancy Rates of All Grades combined are well over 30%.
Comparison Vacancy Rates in Other Capital Cities:
● A Grade Office Vacancy Rate in Sydney CBD is less than 6%; and
● A Grade Office Vacancy Rate in Melbourne CBD is less than 8%.