Mr Hewat said the trust would continue to provide low-rental income-tested accommodation, but planned to redevelop the site in the next five to 10 years.
The city's church groups wanted to discuss with the council the best way to manage social housing.
They were prepared to pay a reasonable price for the properties if the council went against their advice and sold them, but did not want to compete with commercial developers.
Salvation Army Major Ian Hutson urged the council to continue providing pensioner housing and said demand would grow.
"It's been observed there's a large number of people in the position of negative wealth, who, in the future, will come into retirement without the ability to own a house."