Taxpayers set to spend $70m as state government swoops on prime West End brewery site

The state government is likely to swoop on one of Adelaide’s premier parcels of land, spending $70m – sparking backlash from developers.

South Australian taxpayers will likely shell out at least $70m for a late swoop on one of Adelaide’s premier pieces of land for housing in a move that has sparked a backlash from developers.

The state government’s development authority, Renewal SA, is expected to buy the historic West End brewery site, at Thebarton, in a deal expected to be finalised within weeks.

Industry sources have revealed the agency is now the preferred bidder for the prime 8.4ha site after entering exclusive negotiations with owner, brewing giant Lion.

Negotiations for the entire land, on the city’s northwest fringes, are ongoing but are understood to be in the final stages.

Senior government officials are understood to be driving the acquisition including Premier Peter Malinauskas, who has previously expressed concerns about developers land-banking sites primed for new housing.

An aerial view of West End brewery site at Port Rd, Thebarton. Picture: Supplied by Beyond Property

But it has added to developer angst about the government’s takeover of a series of land parcels across the city.

Other land parcels Renewal SA has snapped up include the former Franklin St bus station in the CBD and the previous Le Cornu site, at Forestville.

Urban Development Institute of Australia SA, chief executive Liam Golding – a former Labor adviser – said Renewal SA should not be “competing on open market to buy development- ready sites”.

“Out-bidding the market on taxpayer funds risks driving pricing higher, and that would ultimately get charged to the end user, exacerbating affordability issues,” he said.

“The greatest benefit government and Renewal SA can provide to the state and to taxpayers is to focus its efforts on bringing additional stock to market.”

Renewal SA’s 11th-hour bid trumped earlier offers from groups including Perth-based housing group Peet, local developer Amulet Property and a joint venture between Commercial & General and McMahon Services.

The West End Brewery site is likely to be bought by the state government’s development authority, Renewal SA, for $70m. Picture: Naomi Jellicoe

Property Beyond managing director Mark Daniel, the land agent, said his firm was in exclusive talks with a preferred bidder with a deal to be finalised next month.

“We’re still in contract negotiations and the site is still being remediated,” he said.

“There will be further remediation and demolition works and a sale will be concluded after that. We’re working with a preferred party.”

All bidders, Mr Malinauskas and Lion declined to comment.

One industry figure, who declined to be named, said Renewal SA’s involvement undermined the normal sale process.

“It’s costly, in the order of $100,000, to go through the process and to then have it snatched away is a major issue for private developers,” he said.

Opposition spokeswoman, Michelle Lensink, criticised Labor for “moving the goalposts”

“We need all hands-on deck right now to fix South Australia’s housing supply crisis,” she said.

“But Peter Malinauskas is arrogantly pushing ahead with his high-risk strategy of playing Bob the Builder and trying to outbid the private sector for major development sites.

(His) captain’s call will drive up land prices and slow down the supply of homes, triggering steeper costs and huge timeline blowouts that we wouldn’t see under the management of private sector businesses.”

Mr Malinauskas’ spokesman said the government was serious in addressing the housing crisis.

“We’re pulling every lever we can to build more affordable homes, unlike Michelle Lensink and the Liberals, whose only intervention was to sell off public housing,” he said.

Asked on Sunday about Renewal’s work, the Premier said: “This is not a threat to the private sector, we’re not trying to crowd out the private sector. We want to work with them.”

Announcing a sale in October last year, Lion is seeking to change planning laws to allow for development of apartments up to eight storeys along with retail and commercial building.

After being an early contender to house police horses, senior officials have rejected any possible move from a new Gepps Cross home.

West End ceased production at Thebarton in June 2021 after brewing was first started in 1886.

The original Walkerville Brewhouse Tower, located behind the brewery’s former glass-fronted building on Port Rd, and an electrical transformer structure on Holland St will be retained as part of heritage protections.

An archaeological dig of the site also uncovered a series of historically significant items including the ruins of Thebarton Hall – the cottage once lived in by Colonel William Light.

Prominent Adelaide developer, and former Renewal SA board member, Theo Maras said the agency’s role was important and hoped the brewery site was developed the same as nearby Bowden.

“Renewal SA, in my view, is exactly the right body to be able to buy large tracts of land, as they did at Bowden and as they’ve done in other parts of Adelaide, and then do the master planning,” he said.

“It’s all very well for the big developers to say we wanted a slice of that … but then they never ever get the maximum development out of it because they can’t deal with the planning, they can’t deal with the council, they can’t deal with what the community needs at large because it’s all about the almighty dollar.

“And in my view the community gets a far better outcome, the state gets a far better outcome – the money is spread throughout the development industry and we’re not held captive to the national developers.”