South Gippsland Shire Council’s Power Street property is now on the market for lease, becoming a test case in the debate about what councils should do with surplus or under-used public assets.
Council purchased the Power Street site in February 2020 to address constraints at the existing Foster depot in Pioneer Street and to preserve future planning flexibility if the town centre expanded under the Foster Structure Plan.
Following the purchase, $370,114 was spent upgrading the former warehouse. Works completed in the 2022/23 financial year made the building suitable for office, meeting and storage uses.
Later operational assessments found further work may be required to fully meet council needs. When considered alongside planning around the existing depot site and a wider building portfolio review, council determined relocation was not required and the current depot remains suitable for operational use.
Council instead resolved in December 2025 to test the commercial leasing market, with a report due back by April 2026 outlining potential income, costs and budget implications.
The Expression of Interest campaign is now underway, with early market interest emerging according to Commercial Property Manager Trevor Rowley from Alex Scott and Staff.
The move highlights debate around council involvement in commercial property and the role surplus public assets should play in long term financial sustainability with two local councillors taking opposing views at the December council meeting.
Cr Scott Rae said selling would permanently remove any future return on the asset.
“If you sell it at a price even equal to the investment, you have forever abandoned any potential return on investment,” he said, adding leasing could allow council to retain and potentially grow the value of the asset while generating income.
Cr Sarah Gilligan said she wants to see the financial details before forming a final position but supports testing the market.
“I don’t have a problem exploring commercial ideas for long term financial sustainability if the initiative creates a return that can be embedded into our 10 year financial plan,” she said.
She added councils face ongoing financial pressure, with rates making up about 62 per cent of income.
Council is continuing a broader review of its building portfolio, with public consultation planned once draft findings are prepared. David Barrett
