The Australian government intends to relocate personnel from Victoria Barracks in Sydney, the historical home of the Australian Army, to a high-rise office building in the central business district that is owned by a Singaporean real estate group and mortgaged to a Chinese bank. This plan surfaced during a Senate inquiry into the Defence Department’s proposal to sell 67 Commonwealth-owned properties, aiming to raise approximately $1.8 billion.

Victoria Barracks, built in the 1840s and still functioning as a secure military facility, has faced considerable opposition from various sectors, including politicians across the spectrum, former military officials, business leaders, and public figures. The site’s potential closure would result in the transfer of hundreds of defence personnel to Defence Plaza, a 28-storey tower on Pitt Street.

Concerns were raised during the inquiry by Senator Jess Collins, who questioned Peter West, acting deputy secretary of the Defence Department’s Security and Estate Group. Senator Collins highlighted that the Defence Plaza building was mortgaged to the Oversea-Chinese Banking Corporation (OCBC), which operates in mainland China and several other Asian markets. She asked why the government would move key military operations into a building with financial ties to a Chinese bank.

Mr. West acknowledged that many of the facilities Defence uses are foreign-owned but emphasized that security processes are in place to assess any potential risks related to ownership or control. He stated that Defence continually evaluates whether foreign ownership presents security concerns and takes necessary steps to mitigate those risks in lease agreements. West also noted that the Defence Department leases five floors in the building, with the current lease having commenced in 2023 and secured for ten years. The Australian government is paying $231 million in lease costs, with an additional $83 million spent on fitting out the premises.

Senator Collins expressed further unease about the transparency of other tenants occupying Defence Plaza and the broader implications of shifting army headquarters into a property with such financial arrangements. She contrasted this with Victoria Barracks, which is wholly owned by the Australian government and Defence Force, underscoring the risks introduced by the current arrangement.

When asked if any Australian banks held mortgages over Chinese defence bases, Mr. West responded that he was unaware of such arrangements. The inquiry continues to examine the potential implications, balancing the need for modern defence accommodation with national security considerations linked to property ownership and financing structures.