By Darian Macey, September 7 2026

Evidence at the 4 September Senate hearing shows the Defence estate divestment program moving into delivery. Some sites have been sold or vacated, but receiving locations, fit-out costs, environmental constraints and replacement requirements remain open.

The latest Senate hearing into the management of Defence estate assets clarified an important point: planning for the divestment program is proceeding, but its site-level delivery plans are at very different stages of maturity.

Defence told the committee that the independent estate audit identified the sites proposed for divestment. A senior Defence steering group, including representatives of the services and Defence groups, then analysed the capability effects, costs, risks and options for replicating functions elsewhere.

Defence said four sites had been sold, several more had been vacated and were ready for transfer, one mess lease had concluded and another seven transitions were in advanced planning. It has also held 28 community information sessions attended by more than 2,300 people, and 59 formal consultations involving more than 10,000 affected Defence employees and cadets.

The hearing nevertheless confirmed that several important decisions remain open.

The receiving estate is becoming the main issue

At Victoria Barracks Melbourne, Defence expects Defence Plaza Melbourne to accommodate around 70-80 per cent of affected staff after refurbishment of some areas. Additional leased accommodation will still be required in the Melbourne CBD. The Defence witness could not confirm whether the required fit-out had been costed.

For Victoria Barracks Sydney, Defence Plaza Sydney and Randwick Barracks remain options. Defence is considering whether some elements could move to Defence Plaza Sydney in stages, but the future location of the Forces Command headquarters function has not been decided. That decision is linked to a wider review of potentially co-locating Air Command, Forces Command and Maritime Command.

Some transitions are clearer. Defence expects personnel from Irwin Barracks to move to Palmer Barracks. A Defence witness also said her staff at Edinburgh Parks would move to a facility at Osborne; the evidence did not establish that this was the destination for every occupant. In Tasmania, the hearing referred to multi-user depot planning and construction, although it did not resolve every site-specific transition.

RAAF Base Glenbrook presents a more complicated case. The future location of Air Command is connected to the geographic headquarters review, while detailed relocation costs are still to be worked through. Defence expects an approximately $11 million secure facility at Glenbrook to receive two to three years of use before the transition. Defence indicated that planning for the facility began around 2022, before the estate audit.

These examples show why the commercial implications extend well beyond selling surplus land. The receiving facilities may require as much attention as the properties being vacated.

Environmental and stakeholder constraints remain live

HMAS Penguin will be only partially divested, with Defence retaining the operational waterfront and clearance-diving capability.

Defence said detailed environmental work would form part of the divestment and market process with the departments of Finance and Environment. Questions about endangered seagrass, White’s seahorse and cauliflower soft coral were either acknowledged as not having been considered specifically at the earlier stage or taken on notice. Community and local-authority input may still shape the form of the sale and any future development.

The hearing also confirmed that external stakeholder consultation generally followed the government’s 4 February announcement. At Lancer Barracks, committee questioning cited NSW Police use of the site for emergency operations; Defence confirmed that it had not consulted NSW Police before the divestment decision.

This creates delivery risk. Existing users, heritage obligations, environmental conditions and local planning controls may materially affect the timing, scope and value of individual transactions.

A dispersed pipeline of work

Industry should not expect this program to emerge as one neat divestment procurement. The likely work packages include:

• transition and accommodation planning
• office refurbishment, fit-outs and additional leased premises
• secure-facility replacement and ICT relocation
• new or expanded receiving facilities and multi-user depots
• asset surveys, environmental investigations and approvals
• contamination assessment, remediation and enabling works
• heritage, planning and community-consultation services
• valuation, due diligence and transaction support

The delivery structure is already split. Finance is leading the divestment process, with KPMG identified as Finance’s strategic partner rather than a Defence contractor. Defence is preparing sites for transfer and continues to use JLL for property expertise, valuations and support within the Estate Transformation Division.

That means opportunities are likely to appear through different agencies, property arrangements, landlords, delivery partners and receiving-base programs. Businesses watching only for a single headline divestment tender will miss part of the market.

The broad policy decision has been made. The next phase will be determined site by site as receiving locations are selected, costs are approved, environmental and heritage issues are resolved, and properties move into formal sale tranches.

SOURCE NOTE

Based on evidence given to the Senate Foreign Affairs, Defence and Trade References Committee inquiry into the Management of Defence estate assets, 4 September 2026. The source is an uncorrected proof Hansard and may be amended. Statements made in committee questions have not been treated as established facts unless confirmed by Defence evidence.

Author: Darian Macey

Darian is a former Engineering Officer with the RAE with tertiary qualifications in Engineering and Project Management. He is a leading practitioner within Australia's NSI sector with previous employment in Government, project management and building contractor organisations.