Charter Hall's 1PSQ the first of a new university push
Charter Hall is eyeing tertiary education’s $45 billion-worth of property assets and the investor and fund manager wants to sell itself to the sector with its new 1PSQ tower in Parramatta.
The $250 million tower that will open early next year as Western Sydney University’s Parramatta campus is the largest tertiary education facility by any developer in Australia to date. The building with sustainable design and energy efficiency measures that uses rainwater to meet 35 per cent of its toilet needs has a 5-Star Green Star education design rating.
The first education development for Charter Hall, 1PSQ was unlikely to be the last, head of office development Andrew Borger said.
“As universities look to provide innovative built form solutions we believe there will be opportunities opening up for both new builds and potential better utilisation of existing property assets,” Mr Borger told The Australian Financial Review. “We’re now bidding and working with a number of universities across the country for their existing requirements or future requirements.”
An artist’s impression of the 1PSQ building in central Parramatta. Photo: Supplied
Demand for education services is booming – Australia’s education exports jumped to a new high of nearly $21 billion in the year to September – and technology is forcing traditional universities to use their existing real estate differently. With students no longer having to attend lectures to get information, for example, many universities are retooling facilities to make students rely on them for experiences – such as by integrating undergraduates with research work – and interaction with others.
“The existing buildings of the past are unlikely to prove the right solution in the future,” Mr Borger said.
For real estate investors, the attractions of long-term tenants backed by state and federal government revenues – WSU’s lease of the 26,500-square-metre 1PSQ is up to 40 years – are clear.
“Universities are long-term occupiers,” he said.
Mr Borger declined to comment on whether Charter Hall would look to enter into sale-and-leaseback transactions with universities that were keen to free up capital, saying it was up to individual institutions.
“Being in the education space, you don’t necessarily have to own the bricks and mortar for education,” he said.
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