Lane Cove locals just want the lifts and escalators at Lane Cove Market Square replaced.
Councillors Bennison and Taylor have tabled a notice of motion at the upcoming March 2026 Lane Cove Council meeting calling for the building managers to be replaced. This will not fix the numerous issues at Lane Cove Market Square.
In the Cove has undertaken an extensive review of the legal documents relating to the centre (which are on the public record) and sought comment from the Region Group and Woolworths Limited.
In a nutshell:
Lane Cove Council need to ensure the other owners agree to the replacement of the lifts and pay 70% of the costs.
Lane Cove Council as head lessor needs to put pressure on Region Group to replace the escalators.
Background
Lane Cove Market Square opened in 2009 with Woolworths as the anchor tenant.
The centre’s development was a joint venture between Lane Cove Council (Head Lessor) and Woolworth Limited (Head Lessee).
Lane Cove Council provided the land, and Woolworths Limited was involved in the design and construction of the centre, as well as its leasing.
This type of venture was standard practice for Woolworths Limited: to design its own centre and have a say in the types of tenants that would also be in the centre.
Woolworths Limited incorporated a property company, SCA Property Group (SCP), to manage 56 convenience-based retail properties valued at $1.4 billion in growing neighbourhood and regional areas. SCA Property Group assets included the Lane Cove Market Square lease.
Woolworths transferred its ownership to SCP, which was then listed on the ASX as a separate, independent real estate investment trust in December 2012. SCP changed its name to Region Group.
Organisations involved in Lane Cove Market Square Management
Head Lessor and Land Owner: Lane Cove Council
Head Lessee: Region Group
Anchor Tenant and Sub Lessee: Woolworths Limited (but not involved in the management of the centre)
Facilities Manager/Building Manager: Knight Frank
The legal documents that set out the responsibilities for the upkeep and maintenance of the centre include a Building Management Agreement (which covers the lifts in the centre) and the Head Lease (which covers the escalators/travellators):
Building Management Agreement
The Building Management Agreement provides that each designated owner is a Member of the Building Management Committee:
| Component | Description | Member |
| Public Carpark | A Stratum Lot containing public carparking for use in conjunction with the Library, Gymnasium Lot and Supermarket and Retail Lot | Public Carpark Owner (Lane Cove Council) |
| Library | A Stratum Lot containing a public library | Library Owner (Lane Cove Council) |
| Supermarket and Retail Lot | A Stratum Lot containing a supermarket and retail and commercial components | Supermarket and Retail Lot Owner/Head Lessee |
| Arcade | A Stratum Lot containing an arcade and public accessway | Arcade Lot Owner |
| Gymnasium Lot | A Stratum Lot containing a public gymnasium | Gymnasium Lot Owner |
The Building Management is responsible for operating and managing Market Square and
may appoint a Building Manager, a Facilities Manager, and engage Service Contractors for the operation, maintenance, repair and replacement of Shared Facilities (which includes the lift).
The Building Management Agreement provides that Lane Cove Council must pay 70% of the cost associated with the lifts.
Head Lease Relevant to Escalators
The Region Group leases the supermarket area and specialty shops, including the escalators, until 2059 (with a 49-year option).
The lease specifically notes that the services (including the escalators) must be maintained by Region as the head lessee, including major repairs and replacements. The only two exceptions to this are if the damage is due to wear and tear or an insured event.
So, on the face of it, Region is not responsible for replacing the escalators due to wear and tear. However, Lane Cove Council has a very good argument that when the escalator reaches the end of its life, end-of-life replacement is not wear and tear.
Response from Region Group
ITC asked the Region Group for their specific plans on the replacement of the escalators and received the following response:
“I completely understand the frustration the escalator outages have caused, particularly when they affect access to Woolworths. Lane Cove Market Square is such an important centre for the community, so when something as like the escalators aren’t operating as they should, it understandably becomes a focus for customers.
These systems were installed in 2009 and as with many assets of this age, they require ongoing maintenance and periodic upgrades. Our team is currently managing both the immediate operational impacts and reviewing longer-term solutions to ensure reliability for customers and retailers.
To this end, this week we are commencing a comprehensive diagnostics program across the centre’s lifts and escalators with specialist technicians. The aim of the work is to properly understand the causes of the reliability issues we’ve been seeing and determine the most appropriate way to address them. As part of the process, each piece of equipment needs to be individually tested and assessed. That does unfortunately mean some units may be unavailable for periods of time while this work is undertaken.
In relation to the escalators specifically, the diagnostics program currently underway will inform what remediation or replacement works will be required. As you’d appreciate, those decisions need to be guided by the technical assessment that is now in progress. I will come back to you with another update once that assessment concludes.
To clarify the point regarding responsibility, the vertical transport at Lane Cove Market Place operates under the Building Management Statement, as well as the various leases we have in place with Lane Cove Council. Each of those documents set out various responsibility and cost allocations as regards operation, maintenance, repair, replacement etc of the vertical transport infrastructure at the centre, and once the diagnostic program has been concluded we will be in a position to reference those documents to assess the need for involvement from other parties such as Lane Cove Council or the BMC where required.
In the meantime, the centre team is continuing to manage access to ensure customers can reach Woolworths and other retailers via the lifts and alternative routes where needed. As part of the diagnostics program, we will be implementing proactive communication to customers and retailers to ensure that they are updated on progress and outages. Additional staff will also be stationed during busy periods to assist customers when the escalators are unavailable during diagnostics phases.”
Why Isn’t Woolworths Putting Pressure on The Region Group to Fix the Problem?
Many of our readers have asked the above question. We reached out to Woolworths and asked them.
Their response was:
“As you mentioned, we do not own Lane Cove Square. This is managed by Region Group, who is best placed to answer any questions regarding the lifts and escalators at the centre.
We’ve been in regular contact with Region Group about ensuring the lifts and escalators operate reliably for our customers and will continue to be.”
If the Lifts and Escalators Have to Be Replaced – Has Lane Cove Council Got The Funds Allocated?
Lifts
Lane Cove Council is required to pay 70% of any costs associated with the lifts.
The Market Square capital replacement reserve is an internal allocation within Council’s restricted cash holdings. It represents the money the Council has set aside by policy resolution for future capital renewal of Market Square assets. The figures below are extracted from the audited Annual Financial Statements.
Reserve Growth: FY2019 to FY2025
| Financial Year | Balance ($’000) | Annual Increase ($’000) | Growth Rate |
| FY2019 (30 Jun 2019) | $30 | — | — |
| FY2020 (30 Jun 2020) | $279 | +$249 | +830% |
| FY2021 (30 Jun 2021) | $529 | +$250 | +90% |
| FY2022 (30 Jun 2022) | $779 | +$250 | +47% |
| FY2023 (30 Jun 2023) | $1,029 | +$250 | +32% |
| FY2024 (30 Jun 2024) | $1,338 | +$309 | +30% |
| FY2025 (30 Jun 2025) | $1,588 | +$250 | +19% |
Source: Lane Cove Council Audited Annual Financial Statements FY2020-FY2025. Note: The line item was named ‘Lane Cove market square’ in FY2019-FY2021 (under internal restrictions) and renamed to ‘Market Square capital replacement’ from FY2022 onward (under internal allocations).
Long-Term Financial Plan Projections
The Adopted Long Term Financial Plan (LTFP) 2025/26 to 2034/35 includes the Market Square Capital Replacement reserve in its 10-year restricted cash projections.
| Financial Year | Projected Balance ($’000) | Annual Increase ($’000) |
| 2025/26 (Budget) | $1,838 | +$250 |
| 2026/27 | $2,088 | +$250 |
| 2027/28 | $2,338 | +$250 |
| 2028/29 | $2,588 | +$250 |
| 2029/30 | $2,838 | +$250 |
| 2030/31 | $3,088 | +$250 |
| 2031/32 | $3,338 | +$250 |
| 2032/33 | $3,588 | +$250 |
| 2033/34 | $3,838 | +$250 |
| 2034/35 | $4,088 | +$250 |
Source: Lane Cove Council Adopted LTFP 2025/26 to 2034/35, page 25.
The Long-Term Financial Plan projects zero capital drawdowns over the 10-year period. The reserve simply accumulates at $250K/year. This means the Council has not budgeted for spending from this fund, despite documented chronic infrastructure failures.
Are The Reserves Sufficient?
If Lane Cove Council only had to replace the lifts, the reserve may be sufficient, but they are also responsible for cost-sharing for amenities upgrades, plumbing, waterproofing, electrical upgrades, fire safety systems, and more. This is a 17-year-old building with documented chronic infrastructure failures.
What Needs To Happen?
Lane Cove Council need to ensure the other owners agree to the replacement of the lifts and pay 70% of the costs.
Lane Cove Council, as the Head Lessor, needs to put pressure on Region Group to replace the escalators.
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