Sydney’s Ausgrid building has become the latest state-owned property to be sold off under the O’Farrell government’s plan to “recycle non-core government property assets” and put the state’s balance sheet to work to fund essential services and infrastructure.

The George Street headquarters of the state-owned electricity generator has been picked up by Singapore-based private property developer, Far East Organisation for $151.8 million after it won a competitive public tender.

Sitting in a prized position opposite Sydney’s Town Hall station and St Andrew’s Cathedral, the building is the latest CBD office block that could soon become a mixed residential, retail and office complex as demand for inner city apartments remains strong on the back of heavy foreign property investor interest.

The asset disposal is part of what the Department of Finance and Services (DFS) calls its “second tranche” of property liquidations, which was announced in July 2013 after selling seven properties in its first tranche resulting in total revenue of $405 million.

Other properties in the Department of Finance and Services’ crosshairs in its second round of sales assets include the sandstone Lands Building, presently occupied by Planning NSW, the Education Building in Bridge Street and vacant land in Waterloo Road, Macquarie Park.

Minister for Finance and Services Andrew Constance said the $151.8 million generated from the sale of the Ausgrid building “significantly exceeded its retention value” and will be used to fund essential services and more infrastructure across the state.

“The sale of this asset again highlights that investors have full confidence in our economy as a key destination for international investment,” Mr Constance said.

He said government is committed to driving efficiencies and ensuring government-owned office space is used more effectively or relinquished.

Mr Constance also noted that the Ausgrid building has the potential for different uses, saying it can be converted into a hotel, retail and residential complex.

He said this conversion will be subject to planning approval and will support hundreds of jobs and critical investment in Sydney’s central business district.

“The sale of this asset again highlights that investors have full confidence in our economy as a key destination for international investment,” he said.

Aside from the plan to sell off “non-core” property assets, the government has also sent its ministers and ministerial staff packing from their traditional Sydney offices to fulfil an election promise to save money on leasing costs.

In November 2013, the DFS announced that government ministers, the Department of Premier and Cabinet and NSW Treasury would vacate their offices at Governor Macquarie Tower (GMT) and move a few blocks downtown to 52 Martin Place.

The government said the move generated a saving of $90 million over the term of a new 12 year lease, with the proceeds to be redirected to its frontline services.