Caitlin Caldwell and Christine Brennan.
A $10 billion union-backed industry superannuation fund has come under fire from Labor MPs and locals for paying more than two times the going price for a golf course bordering coveted green wedge land before seeking planning permission or rezoning for redevelopment.
Industry Super Property Trust, the nation’s largest unlisted property fund manager whose 35 super fund members include representatives from the controversial building union CFMEU, paid $125 million for the Kingswood Golf Course that was valued at $52 million.
‘The price paid for the Kingswood Golf Club land seems very high, considering the land has not been rezoned and the claim by Kingston Council that no rezoning application has been received or considered,’ says Labor shadow state attorney general Martin Pakula, who previously described the deal as ‘extraordinary’.
Shadow Planning Minister Brian Tee is warning that even if the City of Kingston votes to rezone the land he won’t ‘simply rubber stamp such a recommendation’ if elected this week.
Local members of parliament have also questioned how the industry fund can be confident about approval for rezoning before applying and whether it has any idea about how many dwelling might be allowed on site, which will determine the profitability of the deal.
ISPT declined to comment about purchasing the land, which is about 22 kilometres south-east of Melbourne, bordering hotly contested green wedge land and Dingley Village.
But the fund has a history of buying golf courses and other sporting venues for residential redevelopment.
The lower valuation for the purchase is based on it remaining a golf course with the higher believed to be its estimated property value.
The sale follows a bitterly opposed merger of the Kingswood Golf Club with the nearby Peninsula Country Golf Club in Frankston, with some former Kingswood members threatening to have the merger unwound.
The 53-hectares of open space are among many on Melbourne’s urban fringe under pressure from rapid population growth as Victoria’s two major parties push for changes to urban growth boundaries in the state election.
‘Stop using golf courses for smoke screens for housing estates,’ said Barry Ross, secretary of Defenders of the South East Green Wedge, a community group attempting to prevent further development.
Local councillors, including independent Rosemary West, say they will be writing to the industry fund asking why it is spending more than twice an independent valuation of the land by Ernst & Young.
Ms West, a former trustee of an industry fund, said she is withdrawing from Media Super, which invests in ISPT, and reinvesting in a competing industry fund.
Residents living around the golf course, which include former mayor and current counselor Paul Peulich and his mother, state member for south eastern metropolitan region, Inga Peulich, fear prices of properties bordering the course have already dropped by 10 per cent.
ISPT has a history of buying and selling land in Melbourne’s fastest-growing metropolitan areas for redevelopment, having sealed 17 deals during the 12 months totaling $850 million.
They include an $80 million project on the former Pakenham Racecourse and the recent $25 million sale of a 37-hectare site in Werribee. Both have permits for 500 or more medium to high-density units.
South-east Melbourne is expected to grow by more than 480,000 people and need an extra 205,000 homes over the next 20 years, according to estimates from the state government’s Plan Melbourne strategy.
Caitlin Caldwell and Christine Brennan are journalism students at Swinburne University.