Defence renews Campbell Park lease after two-year search for new ACT office space

The Department of Defence has extended its long-standing lease at Canberra’s Campbell Park offices until 2027, two years into a search for an alternative site.

Campbell Park was built in the 1970s in bushland just east of Mount Ainslie to accommodate rapidly increasing numbers of Defence Department personal.

The 450-metre-long buildings are an example of Canberra’s brutalist-style public architecture – much like the Cameron and Callum Offices, the High Court, and the National Gallery.

Campbell Park currently houses around 2,000 office and administration workers.

The building was sold to the private sector in 2002 and leased back to Defence on a 20-year lease which is due to expire soon.

In 2019 the department went to market, looking for a replacement for the ageing facility.

However, Defence has confirmed in a statement to Region Media that they are staying in the building for the time being.

“The Department of Defence has a 20-year lease on Campbell Park Offices that expires in 2022,” a Defence spokesperson said.

“Defence recently exercised the option to lease the Campbell Park Offices for a further term of five years.”

The spokesperson said the department’s search for new accommodation is continuing, but would not elaborate on its progress or details of the lease extension.

“In 2019, Defence undertook an approach to market seeking alternative office accommodation to replace its Campbell Park Offices,” they said.

“That procurement process is in progress and subject to probity.”

The five-year extension gives Defence more time to find a suitable new site.

Region Media understands several major ACT development groups have already put forward bids for new Canberra locations.

The original sale of the Campbell Park offices into private hands wasn’t without controversy.

It was sold for $98.7 million to GE Capital (Beldon) Pty Ltd in June 2002.

In May 2005, the Australian National Audit Office (ANAO) published a report into Defence’s management of long-term property leases. Then Auditor-General Ian McPhee found that the money from the sale of Campbell Park was to be invested in Treasury bonds and the proceeds put towards the 20-year lease.

Those proceeds were estimated to be $286 million.

However, the total of the lease came to $336 million, leaving a $50 million shortfall and exhausting the proceeds 16 years into the lease.

The ANAO also found Defence had committed to more extensive responsibilities at Campbell Park than usual under standard Commonwealth National Lease terms.

This included an additional obligation to maintain building services, plant and equipment.

“It is not common practice for Defence to assume such repair and maintenance commitments in expenditure leases negotiated by Defence,” the report said.

The report also notes that the only assessment showing value for money in Campbell Park’s sale and leaseback was done after the sale was completed.

Campbell Park has changed hands since the original sale and is currently held by Asian investment firm PAG and Brisbane-based Cromwell Property Group.

Cromwell issued a short statement to Region Media on the Defence lease.

“Defence is a valued tenant customer of Cromwell; however, the terms of the arrangement are commercially confident,” a spokesperson said.