Government property decisions can have long-term financial consequences. A rushed lease, poorly defined accommodation requirement or fragmented procurement process can lock an agency into unnecessary expenditure for years. By contrast, strategic planning can help government organisations understand what they need before they enter the market—and procure property solutions that deliver stronger value.
For public sector organisations under constant pressure to demonstrate efficiency, better planning is the foundation of better procurement.
Why Property Planning Matters to Procurement
Property procurement is about more than finding suitable buildings at an acceptable price. Decisions need to consider location, workforce requirements, space utilisation, lease terms, service delivery, future demand and whole-of-life costs.
The Australian National Audit Office (ANAO) has highlighted the scale of the issue. Its audit of Commonwealth leased office property found that 94% of non-Defence domestic office accommodation was leased, with expenditure on leased office property reaching approximately $2 billion in 2016–17.
When expenditure is this significant, even relatively small improvements in planning can have meaningful financial consequences.
Start With Demand, Not Procurement
One of the most effective ways to improve procurement outcomes is to establish the actual property requirement before approaching the market.
Agencies should assess:
- Current and projected workforce requirements
- Existing space utilisation
- Lease expiry dates and contractual obligations
- Service delivery requirements
- Opportunities to consolidate locations
- Future operational and technology needs
- Whole-of-life property costs
This creates a more accurate statement of need and prevents procurement teams from simply replacing existing arrangements without questioning whether those arrangements remain appropriate.
The ANAO’s work on the Australian Taxation Office found that earlier property management practices included short-notice leasing and limited long-term planning. The ATO subsequently introduced a Property Management Plan, location plans and an accommodation planning system to better forecast demand and use of office space.
Use Data to Challenge Assumptions
Property decisions are stronger when they are based on evidence rather than historical patterns.
For example, an agency may discover that it is paying for significantly more space than employees actually use. Alternatively, multiple teams may be operating from locations that could potentially be consolidated.
The Commonwealth’s experience demonstrates the potential. The ANAO reported that initiatives to reduce surplus office space and improve coordinated property procurement were associated with substantial potential savings, including a reported $300 million in savings from Operation Tetris and a further $100 million from coordinated procurement arrangements.
Importantly, the ANAO also cautioned that some savings estimates were not supported by sufficiently robust methodologies. This highlights an important lesson: good planning requires not only data, but reliable data and disciplined measurement.
Procurement Works Better With a Clear Strategy
A well-defined property strategy gives procurement teams greater leverage.
Rather than entering the market with a vague requirement, agencies can establish their preferred outcomes in advance. This might include reducing the total footprint, consolidating leases, improving workplace utilisation or negotiating more flexible arrangements.
The Australian Government’s procurement data illustrates the scale of public purchasing. In 2024–25, AusTender recorded $104.9 billion in procurement contracts, while lease and rental of property or buildings accounted for approximately $1.49 billion in reported contract value.
These figures reinforce why procurement decisions should be connected to broader strategic objectives rather than treated as isolated transactions.
Think Beyond the Lowest Price
A successful property procurement is not necessarily the one with the lowest headline price.
Government agencies should consider the total value delivered over the life of an arrangement. A cheaper property may create higher costs through poor location, inefficient space, maintenance requirements, employee impacts or future relocation.
A strategic procurement approach considers:
- Cost – What will the arrangement cost over its full term?
- Functionality – Does the property support service delivery?
- Flexibility – Can the arrangement adapt to changing demand?
- Risk – What contractual, operational and financial risks exist?
- Value – Does the outcome support broader government objectives?
This whole-of-life perspective can prevent short-term savings from creating larger costs later.
Make Property Planning an Ongoing Process
Planning should not begin only when a lease is about to expire.
Forward planning gives agencies time to analyse alternatives, consolidate requirements, test the market and negotiate from a stronger position. The ANAO has noted the importance of proactively planning for lease expiries several years in advance as part of Commonwealth property management.
Regular reviews can also identify changing demand before it becomes an expensive procurement problem.
Better Planning Creates Better Public Value
Government property is ultimately an enabler of public services. The objective is not simply to occupy buildings, but to provide the right space, in the right locations, at an appropriate cost.
Strategic planning connects property requirements with procurement decisions, helping agencies reduce unnecessary space, avoid rushed purchasing and make better use of public resources.
For government organisations looking to improve procurement outcomes, better property planning provides a practical starting point. By understanding demand, using reliable data, planning ahead and evaluating whole-of-life value, agencies can turn property procurement from a reactive exercise into a strategic tool for delivering efficiency and stronger public value.
