Riding the $375bn Bow Wave: What AUKUS Deal Could Really Deliver

Costing up to $370 billion, the buying, building and hosting of up to 13 nuclear submarines under the trilateral AUKUS pact will be the largest defence spend in Australia’s history. It also promises to transform the mid-sized metropolises of Adelaide and Perth. Medium-term activity alone will be mind-boggling, with Prime Minister Anthony Albanese promising two massive “down payments” on the 30-year megaproject. The first down payment will be $12 billion toward building a $25-billion defence precinct at the Australian Marine Complex at Henderson in Perth’s south. The second will be a $3.9-billion kick-start of a $30-billion submarine construction yard at Osborne in Adelaide’s north. Chamber of Commerce and Industry WA chief executive Will Golsby tells The Urban Developer AUKUS will require a major infrastructure push to accommodate the influx of naval personnel to Perth. “Housing will be central to this, with around 2000 UK and US service people expected to be stationed at Henderson at any given time,” he says. “Alongside the growing local workforce, these people will need somewhere to live and those properties will need to meet the standard required for defence housing.” Golsby says many of the personnel stationed at Henderson will bring families, which will put pressure on roads, schools and healthcare. He says there will also be an increase in industrial activity to support AUKUS and so good planning will be vital. ▲ Will Golsby: Good planning needed to manage the housing, infrastructure and services 2000 UK and US service personnel will need in Perth. Within easy sight of the idyllic beaches of Rockingham, 17km south of Henderson, the HMAS Stirling naval base at Garden Island will host one UK and up to four US nuclear submarines under the AUKUS pact as early as next year. Rockingham mayor Lorna Buchan says her municipality’s 10-year city centre structure plan, signed off in January, spans from Rockingham train station to the beachfront about 4km to the west. “The plan makes provision for an additional 16,000 homes to cater for another 30,000 people and we’re going up, not out, so we’re not destroying greenfield sites,” she says. “Apart from the residential accommodation that we we’re seeking, there are other sectors [we need] such as defence and advanced manufacturing in industrial zones. “We’re looking for office, aged care and retirement [developers] and also tourism and short term accommodation to accommodate interstate and international visitors.” She says that in February Rockingham hosted almost 200 UK submarine personnel who had to be housed in Fremantle, 30km to the north, because her city did not have enough accommodation. ▲ Rockingam mayor Lorna Buchan is on the lookout for developers wanting to take Rockingham to the next level. Buchan says one development site on Rockingham’s foreshore esplanade is zoned for 24 storeys. “The others are slightly smaller around that area where we have a unique [for Perth] north-facing beach, which means we haven’t got an overshadowing problem,” she says. “On our foreshore we’ve got quite a few empty blocks; it looks a bit like a gappy set of teeth and we’re desperately trying to attract investment for short-term accommodation.” She says hotels and a conference centre “would go down brilliantly”. “Rockingham is growing by 14 people per day and we’re under pressure for housing and we’re desperate for some diversity in our housing supply, which is why we’re desperately trying to attract that high density,” she says. “There are some really big blocks [available] and these are already serviced with local roads and public open space.” AUKUS-linked business park refused A developer that last week failed to gain approval for many of the land uses on Buchan’s wishlist is Perth-based Scope Property. At the Australian Marine Complex at Henderson, where the AUKUS submarines will be maintained, Scope had proposed a $200-million business hub . That project was to have provided two office towers of 15 and 13 storeys, a five-floor building with restaurants and retail tenancies, a five-level medical and office building and a 10-level, 161-key hotel right in the midlle of the Australian Marine Complex. But after a City of Cockburn planner recommended the project be refused , WA’s outer metro development assessment panel followed suit with a unanimous rejection of the proposal. At a decision-making meeting, panel member John Syme said Scope had submitted “a nicely designed and nicely conceived and nicely worked out proposal, but it just does not belong in this location”. “The Western Trade Coast [that includes the Australian Marine Complex] is the most important piece of economic infrastructure [and] industrial land in the state by a margin that you can’t believe,” he said. “It is one of the most productive pieces of industrial land in the world ... the Henderson precinct itself is an important element of that. “Industrial land is always in danger of encroachment by inappropriate uses, residential uses or often too many uses; offices is one of them [at] too big a scale, which actually don’t belong in an industrial estate but may be better located in an activity centre.” Syme said the development would be better placed elsewhere in Cockburn or at Fremantle, and the hotel use was particulalry inappropriate for the Australian Marine Complex. ▲ A rendering of Scope’s $200-million business park refused last week. Scope director Shaun Quinlan later tells The Urban Developer the company will assess its options for the 1.8ha site, only 15 per cent of which is built upon. He rhetorically asks how shifting the project would adequately serve the Australian Marine Complex and its ramped up AUKUS operations. “It’s quite quite ridiculous, really, and very, very narrow-minded and short-sighted, especially considering we tabled a letter of support from the Office of Defence Industry [Support],” he says. ‘Plenty of land in Rockingham’ Perth-based Urbis partner David Cresp says AUKUS will envigorate Rockingham, which had been a relatively sleepy area. “AUKUS is certainly driving a lot of interest though Rockingham and surrounding areas,” he says. “It’s an area where you generally find that density is hard to make work. “Now there’s some drivers and a recognised need for more housing both in lower density and higher density in the area.” He says there is plenty of vacant land around the Rockingham town centre. “Fundamentally, I think Rockingham in 10 years, once this is all there and established and bedded down, it’s going to be quite a different place than the Rockingham we’ve thought of historically,” he says. “ It’s got some amazing beach area down there and the coastline, so I think it’s very ripe for rejuvenation and some investment spending and that’s certainly what it’s going to see in coming years.” ▲ David Cresp says density has been difficult to achieve in Rockingham but AUKUS should change that. Image: Chris Thomson WA Premier Roger Cook is fond of saying that AUKUS will turn defence into the state’s second largest industry, only behind WA’s mammoth mining operations. As impressive as that sounds, most AUKUS expenditure will not be in WA but in SA where at least 4000 workers will be employed to design and build the submarine construction yard where new AUKUS-class nuclear subs will be built. Construction of the 75ha yard at Osborne in the City of Port Adelaide-Enfield is expected to use 126,000 tonnes of steel, equal to the weight of 17 Eiffel Towers. Historic Port Adelaide to benefit Port Adelaide-Enfield mayor Claire Boan says the activity surrounding AUKUS will pose challenges for the historic suburb of Port Adelaide, which is undergoing an urban rennaissance and is the SA capital’s only precinct-scale heritage area. “We’ve had some really excellent developers coming to the Port; they’re buying, and they’re doing something with, [property] whereas in the past we would have people who would buy property and then sit on it and it just makes it really hard to have a shift,” she says. “So we’re really heavily relying on good relationships with local developers to ensure that we can have really good outcomes when they are building, but most of all act on the fact that they have a property.” ▲ Claire Boan: good relationships with developers and timely state planning should ensure AUKUS activity is channelled in the right direction for her city. Boan says Osborne and the nearby suburb of Taperoo are vibrant but have areas with ageing housing stock that with careful planning could benefit from AUKUS. “Port Adelaide is an attractive place without defence, but that extra flow-on from [AUKUS] is probably looking at the wider part of [northern Adelaide’s Lefevre] Peninsula about how the state government is going to plan for that future to prepare for the defence [industry growth],” she says. Developers dissect the Osborne opportunity Ginos Group managing director Zis Ginos, who has a handful of heritage adaptation projects either planned or under way at Port Adelaide, says the impact of AUKUS is still unclear. “I don’t know how, or to what extent, we’re going to benefit from it,” he tells The Urban Developer . “We will, of course. “I think it’s going to be a great project and fantastic for Adelaide.” In February, Port Adelaide Football Club chief executive Matthew Richardson nominated the “strategic” location of the AFL and AFLW franchise’s home ground at Alberton—5km south of the AUKUS work at Osborne—as a strength of its planned $250-million Alberton Square project. The 20,000sq m project surrounding Alberton Oval is in a planning and consultation phase that Richardson anticipated would be complete by August 2027. ▲ An early rendering of what Alberton Square might look like. In March, Kite Projects managing director Damon Nagel told The Urban Developer that AUKUS would add to activity generated by current submarine maintenance at Osborne. Kite is redeveloping Port Adelaide’s 10-storey former Marine and Harbours Building into a 100-room retro hotel and has completed Stages 1 and 2 of its 750-home Dock One project that includes two and three-storey townhouses along the Port River. ▲ Damon Nagel with a completed stage of Dock One in the background. “The port really had a lot of stop-start, stop-start, stop-start and I think now there’s that critical mass with the defence submarines and frigates; the amount of work that’s happening here has really given a focus,” Nagel said. “I think that’s done to Port Adelaide what the America’s Cup did to Fremantle in Western Australia.”

Riding the $375bn Bow Wave: What AUKUS Deal Could Really Deliver

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