Tasmania Police state HQ listed for sale in the tightest office market in Australia

“They’ve just effectively grown out of this space,” says listing agent Scott Newton, head of Tasmanian real estate at Elders Commercial.

A broad range of police, fire and emergency management staff are set to move out before their lease expires on June 30, 2026. 

The police headquarters has been owned by a high-net-worth family from Sydney for the past two decades.

The site is estimated to be worth $17 million to $18 million, and boasts an annual net income of around $1.849 million without GST.

The 4665-square-metre building represents an unusual opportunity in a city that’s run out of office space. Hobart has had the lowest office vacancy rate in Australia for the past five years. “We’ve got no vacant space left,” Newton says.

The 10-storey building on the corner of Argyle and Liverpool streets is just a 100-metre stroll from Elizabeth Mall, and about 400 metres from the bustling waterfront – a sight to behold from the upper floors.

The investment in Hobart’s health and University of Tasmania education precincts lends itself to rebirth as a medical centre, offices, residential or student accommodation – “or even conversion to a hotel”, Newton says.

“It’s a reasonably sized building for Hobart, and it’s in a really prominent location.”

Hobart’s office market is extremely tightly held with no new supply under construction, and very little office space outside the CBD, resulting in higher rents over the past few years that provide owners with solid returns.

The city has an office vacancy of 3.6 per cent compared with the national average of 14.7 per cent, according to the Property Council of Australia. 

However, the A-grade sector is even tighter with a rate of 1.3 per cent, providing an incentive for an investor to upgrade and pursue a market gap. The office sector has seen tenant demands increase in a bid to meet regulatory requirements and improve staff satisfaction over recent years.

“It presents a good opportunity for someone purchasing it,” Newton adds.

Elders predict the vacancy rate is likely to continue to remain extremely low for many years to come, continuing to drive rental growth.

The property was constructed around 1967. It underwent major refurbishments in 1995 and 2009/2010, but needs more work. 

“It needs repositioning and upgrading, refurbishing and returning back to the market,” Newton says.

Its floors are fitted out with a mixture of open plan spaces and separate offices, on a floor plate of more than 450 square metres. Among its perks are 26 secure internal car parks, with another nine external parking spots, and “central business” zoning.

The property has a full ducted air-conditioning system, with a central plant located on the roof, and a diesel storage tank in the ground-floor car park, but funds are needed to upgrade its 3-Star NABERS rating,

Obtaining a higher NABERS rating could be achieved by replacing the inefficient central plant equipment, removing the existing fitout, and upgrading the air-handling and finishes, Newton says.

“In terms of an office building, it’s 75 per cent in situ, so you’re not having to get [development approvals] in the current construction climate,” he says. “Buying existing assets makes a lot more sense than starting from scratch.”

The police are set to move into a larger A-grade space at the Telstra Centre at 66-80 Collins Street, Hobart, within the year.

The 1990-built Telstra Centre comprises 10,037 square metres of floor space and 55 on-site parking spots. 

Melbourne-based investors Terraplex bought the property in 2019 for $35.15 million, in what was the city’s second-largest office property sale.

The firm’s investment strategy included plans to undertake fitout works and re-lease the vacant space to suitable tenants, including a long-term lease to the Tasmanian government.

The property is for sale via an expressions of interest campaign closing at 4pm on Thursday, September 25.