Addison Court Units
The ‘Addison Court Units’ (units) located in Orroroo were built by the District Council of Orroroo Carrieton in 2011 with the intended purpose of being used as retirement/aged living units under the Retirement Villages Act.
Over the last 12 years, the units have had various periods of vacancy, utilised for the intended purpose. More recently (2-3 years) the units have been leased out via a standard rental agreement. The last remaining unit that was previously utilised under the Retirement Villages Act has recently been returned to Council and is now available for standard real estate rental.
As part of Council’s Asset Management Plan and good governance, the financial performance of assets is reviewed by administration and future modelling is provided to Council for considered decisions on the financial viability of assets moving forward.
The total costs of managing and holding the units has been analysed including annual costs such as gardening, general maintenance, insurance, water, contractor repairs, real estate agent management fees and the true depreciation of the fixtures and fittings within the units.
Council has reviewed the expenditure and income and has determined that acting in a ‘residential landlord’ capacity falls outside the scope of Council’s core business; Council is of the view that more relevant projects/services can be performed for the community with the funds locked up within these assets. Therefore Council has decided that it is an appropriate time for Council to explore future options for the units considering the currently strong real estate market. This will occur via public sale, either as a whole group or separable units via subdivision.
The financial implications of a sale of the units include the release of capital funds which will enable interest to be earned on bolstered cash reserves via term deposits for the short term. This financial increase in revenue is coupled with an increased rating income when the units are not held by Council.
This relieves pressure on Councils operational budget, and provides a better return on investment. The potential sale additionally reduces Council’s depreciation burden and additionally allows Council to better direct their focus on core Council priorities.
Any enquiries can be directed to the CEO DCOC.