Schools start year with educated property deals
Educational institutions are behind some of Melbourne’s most recent property deals – with one burgeoning private college hoping to settle on the $12 million purchase of a new campus for its swelling student base in time for the second school term.
Another provider, servicing the booming seniors market, has leased prime space in ritzy Brighton after doubling its number of students since 2014.
Various factors including roaring population growth, government incentives to providers and the ability for students to gain permanent residency via education, are contributing to the need for real estate by both independent and public colleges.
In Werribee, 32 kilometres west of town, flamboyant councillor and Western Institute of Technology chief executive, Intaj Khan, has just settled on the $4.4 million purchase of a 6100-square-metre holding.
The property is actually a modern office and laboratory but its high-profile location, with more than 90 metres fronting the busy Princes Highway, attracted non-residential users including several education-based occupiers, according to Julian Heatherich, who marketed the site with Savills colleague James Lockwood and M3 Property Strategist’s Dan Magree.
Also in Werribee, at 12 Synnot Street, a popular local shopping strip, the Wyndham Community and Education Centre in November outbid developers and investors, offering some $1 million for a development site a few metres from one of its established campuses.
The new owner of 12 Synott Street, Werribee, will disregard this approved design for an office building and apply to build a school instead.
The WCEC will disregard its new site’s permit for a three-level, 931-square-metre office and instead seek approval for a purpose-built school, a spokeswoman told commercialrealestate.com.au.
The Department of Education promotes Victoria as “Australia’s Education State”, in recent years directing hundreds of millions of dollars in additional funding to teaching initiatives. This coupled with widespread population growth is contributing to increased demand for Melbourne real estate in recent years, Mr Heatherich said.
In the CBD, rental and sales demand comes from higher education providers, many targeting international students with short courses.
In the suburbs, independent schools will spend millions to secure strategic sites. An example is taking place at the moment, following the Islamic college Australian International Academy recently outbidding residential developers, spending $12 million on a Caroline Springs site owned by Intaj Khan, next door to one of its existing campuses. The Academy hopes to open the new campus to students within months.
Mr Heatherich said schools pay bullish prices for ex-campuses as they still cost far less than the replacement value (ie, building a new college, from scratch). There are also time advantages – it can take years from the time a school is designed, to when it opens.
Councillor Intaj Khan has sold the former college site in Caroline Springs. Photo: Angela Wylie
Not all education providers, however, are structured in a way that allows them to construct a purpose-built campus.
The U3A for example – which targets seniors – has become one of suburban Sydney and Melbourne’s more active tenants.
With 1000 members, the group’s Bayside division in Melbourne has leased one of Brighton’s most prominent buildings, the ex-courthouse, where it plans to open in February.
In a show of how fast U3A Bayside is growing, it had just 770 members when it signed the nine-year deal for 500 square metres with the City of Bayside council last March. In 2014 the group had just 500 pupils.
Bayside councillor James Long said leasing the [Brighton courthouse] facility to U3A was a great outcome for the community.
”Providing a home for U3A in the cultural precinct adjacent to the Brighton Library is a natural fit for an organisation that is committed to expanding people’s knowledge and minds.”
The local council had previously considered leasing it to an 80-seat café as a way to activate the precinct. Instead the premises will run a variety of classes up to seven days a week. It also provides offices for administration to take place.
