Defence audit flags Carlton training depot for sale as local housing push gathers pace

A modest Defence site in the heart of Carlton could soon become one of the most closely-watched parcels of land in the inner city, after the Commonwealth confirmed it is earmarked for divestment under a nationwide defence estate audit.

The Carlton Training Depot, home to the University of Melbourne Regiment, is a 0.26-hectare site located about 1.5km north-east of the CBD, at 65 Grattan St. Under the Department of Defence’s 2024 estate audit, it has been flagged for full divestment, with reserve and training functions to relocate to Simpson Barracks in Macleod and administrative staff to move to Defence Plaza Melbourne.

The announcement has prompted the City of Melbourne to move quickly to secure a seat at the table.

At the Future Melbourne Committee on February 17, councillors unanimously backed a motion from Lord Mayor Nick Reece seeking to develop options for the future use of the Carlton site, alongside Victoria Barracks in Southbank and the Repatriation Clinic on St Kilda Rd.

In his remarks, Cr Reece emphasised the historic and civic significance of the Carlton depot.

“In terms of the site that is for sale in Carlton, that is the University of Melbourne Regiment,” he said. “That, of course, is the regiment which Sir John Monash was a member of. Arguably Australia's most decorated soldier, certainly one of the greatest Australians that ever lived.”

The Lord Mayor warned that the disposal of inner-city Commonwealth land must not be reduced to a simple profit exercise.

The sale of these properties can't be all about profit. There needs to be a sensible balance here that takes into account the community's needs and delivers important community benefits.

The council’s motion requests management to investigate potential community infrastructure, open space, heritage-led adaptive reuse and alignment with the draft Community Infrastructure Plan and long-term precinct planning . It also seeks advice on what land use and built form controls should apply once the site is no longer in Commonwealth hands.

That last point is particularly sensitive in Carlton, where heritage and planning controls are tightly drawn.

Cr Reece referenced the Rathdowne St postal building – a former Commonwealth site that “vastly exceeds in height any of the other buildings in Carlton and overshadows the heritage-listed Royal Exhibition buildings” – as a cautionary tale of what can happen when federal land is not subject to local planning frameworks.

“It would be completely unacceptable for these sites to be developed in a way which was not consistent with the very well-considered planning controls that we have for these areas,” he said.

The Carlton Residents’ Association (CRA) has also weighed in, arguing the site presents a rare opportunity to deliver social and affordable housing in a suburb where land is scarce and demand is high.

A CRA spokesperson said the association would need to ensure the site was not sold with development rights that could exempt it from state planning controls.

“The CRA believes that the existing three-storey building could be recycled and could be adapted to social and/or affordable [housing],” the spokesperson said.

They noted that the front area, currently used as a car park, is north-facing and could accommodate gardens and balconies, providing both public and private amenity for a three- to four-storey housing development at the rear.

“The structure we believe is sound and easily adaptable,” the spokesperson said, adding that any new development “must comply with the City of Melbourne Planning Scheme and Heritage Overlay in relation to height and built form.”

The association also stressed that the site’s long-standing presence in the local community means its future should be subject to genuine consultation and deliver benefits to Carlton residents.

The City of Melbourne’s draft Community Infrastructure Plan provides a framework for assessing such opportunities, identifying gaps in community facilities and open space across the municipality. While much public attention has focused on the 5.7-hectare Victoria Barracks site in Southbank, the smaller Carlton depot may prove equally significant in its local context.

Local stakeholders have already expressed concern about “the risk of heritage loss, potential commercial overdevelopment, and the lack of clarity regarding future public access and land use” following the divestment announcement.

With the Commonwealth seeking to generate up to $3 billion nationally from defence property sales, the pressure to maximise returns will be real.

But in Carlton – one of Melbourne’s most historically layered and tightly controlled suburbs – the debate is likely to centre not on how tall or how dense, but on how well the site can be woven back into the community fabric.

Whether that means affordable housing, community facilities, open space, or a careful blend of all three, one thing is clear: as Cr Reece put it, “we will only get one chance to get this right.” •