Up for sale: The Mercure Hotel in Sydney's CBD. The government body responsible for selling property, Government Property NSW, expects to raise another $865 million this financial year, and $652 and $426 million in the following financial years. The biggest sale to date has been the bundled sale of seven office buildings in 2013 for $405 million, including Bligh House, where GPNSW now leases the space. Property group Cromwell paid $53 million for Bligh House, and sold it this year for $68 million. Other major sales include the Australian Technology Park for $263 million, two office buildings in the Parramatta Justice Precinct for $170 million, the Ausgrid building on George Street for $152 million, the $116 million raised so far from the sale of 47 out of the 250 Millers Point properties set to go under the hammer, $35 million for the Lands and Education sandstone buildings on Bridge Street and $33 million for the former Children's Court site "Bidura" in Glebe. Glossy brochures will also be prepared for the White Bay Power Station in Balmain and the Shangri-La and Four Seasons hotels in the Rocks, the proceeds from the latter to be used to fund a Circular Quay revamp.

The NSW government said it remained committed to development of the White Bay Power Station as a technology and innovation hub. Credit:Tamara Dean Smaller sales have included a former Station Masters home in Waverton for $2.6 million and a former Fisheries NSW waterfront building in Wollstonecraft for $5.5 million. Meanwhile, across regional NSW, hundreds of properties are being offered for sale as the government divests surplus properties and rolls out a "one stop shop" approach to government services. The NSW government currently owns around 277,400 properties, including schools and hospitals, according to the Government Property Register.

Before the establishment of GPNSW in 2013, the state sold an average of $10 million a year in property. Since 2013, this has averaged more than $300 million a year. A spokesman for GPNSW said it was government policy to divest assets which are "not core to service delivery and are not of long-term strategic importance". "The proceeds from these sales have been reinvested into new housing supply, front line services and infrastructure." But the NSW shadow finance minister, Clayton Barr, said the Baird government was "addicted to the sugar hit" of asset sales. "Whether it is electricity assets or government property, they are happy to accept the short-term gain and ignore the long term pain."

The former NSW Treasury Secretary, Percy Allan, who oversaw the sale of State Office Block in the 1980s to make way for the ABN Amro building, said the sell-off was justified because government-owned properties tended to be underutilised and it was better to house public servants in suburban business districts than on valuable CBD land. "I personally think departments should not own offices as it results in their economic cost not being included in their operating costs, with the result that office space is treated as a free resource so not used optimally." "By selling such properties the state could release scarce equity funds for use on social and economic infrastructure, as well as relocate public servants to offices in other parts of Sydney or regional centres where rents are lower." But former a NSW Treasury official, Betty Con Walker, and her husband, an accounting professor at The University of Sydney, Bob Walker, told the Herald in a joint interview that the current sell-off, like the electricity privatisation, was a ​triumph of "ideology" and warned taxpayers would foot a higher bill for rent, while missing out on future capital gains. "It's simply an ideology of small government; let's just get rid of all these physical assets," Ms Walker said.

The sale of sandstone offices on Bridge Street to a Singaporean hotel developer for $35 million in particular was "just ridiculous", the sale price buying "hardly a couple of homes in Mosman or one house in Point Piper" according to Mr Walker. The new owners will spend $250 million on renovations, which the government says will save it money. NSW Treasurer, Gladys Berejiklian, last month declared NSW's net debt was "effectively zero". But the Walkers, who also opposed the privatisation of electricity networks, said the NSW government would be better off borrowing, at incredibly low rates, to fund infrastructure. "This issue about reducing debt ... who said that government's shouldn't have any debt? This is a curious notion," Ms Walker said. "Governments aren't going to go out of business and the debt that NSW has always had has been minor and now almost non ​existent. Governments are able to borrow at such a cheap interest rate, especially now. If they wanted to build all the infrastructure that they're planning to build there is no reason why they couldn't borrow and keep the interest-earning assets."

The co-founder of Access Economics, David Chessell, said calculating whether it made sense for government to own or lease property involved a fair degree of "alchemy". Mr Chessell advised the federal government in the late 1990s on the "hurdle rate of return" it should use in deciding whether to own or sell and lease back Commonwealth government buildings. It was important to run the numbers and decide based on the evidence, Mr Chessell said. "The decision to own or rent should be more analytical than driven by the heart." "The generally accepted methodology for deciding on the minimum rate of return - the hurdle rate - that the government should expect from continuing to own a building is based on the long term bond rate plus an allowance for the risk of property ownership. If set too high, the government would sell all its buildings and if too low the government would always rent."