The big five Victorian universities are beefing up their space requirements in Melbourne’s CBD, underpinning a booming east coast office market that has delivered handsomely for landlords.
In one of the biggest leasing deals of the year, Monash University will take out a whole building with net lettable area of 37,300 square metres in property giant GPT’s campus-style office at 750 Collins Street.
The 10-level building at the bottom of Batman Hill in Docklands is a short distance from Southern Cross train station and currently fully occupied by finance house AMP Capital with 2.4 years remaining on the lease.
The direct deal between Monash and GPT is near finalisation with both parties committing to a heads of agreement on lease terms understood to be set around $520 to $540 per sq m net.
GPT would not comment when approached by BusinessDay.
Bumper returns from its office towers helped the diversified property group book a 28.3 per cent lift in its bottom line profit to $752.3 million, GPT’s 2017 interim results revealed last week.
AMP is speculated to be moving across to the other side of Collins Street into Lendlease’s Melbourne Quarter project where construction has just started.
It will take a slice of the $550 million One Melbourne Quarter building – one of two office towers so far mooted for the site – alongside design and engineering firm Arup, which signed up as anchor tenant in late 2015.
In another deal, a university subsidiary Monash College has taken more than 6000 sq m in a B-grade building at 120 Spencer Street, a deal believed negotiated by Savills Australia.
That space will be used for classes in Monash’s year 12 transition project.
Suburban-based universities such as Monash, Deakin and La Trobe are building their CBD presence, mainly to attract and retain business-oriented and postgraduate students.
Geelong’s Deakin University has a well- established liaison, alumni, industry-based engagement and consulting centre called Deakin Downtown in Lang Walker’s Collins Square development at 727 Collins Street.
La Trobe University, whose main Bundoora campus is in Melbourne’s north, has just completed a deal for an extra 3000 sq m over two levels in a Dexus-owned building at 360 Collins Street.
“We’ve decided to expand our CBD footprint to ensure city workers can access some of our industry connected postgrad courses, particularly in business (including our MBA and business analytics), Law (the Juris Doctor) and a range of health-related courses,” a spokesman said.
Dexus boss Darren Steinberg last week steered Australia’s biggest office landlord to a full-year net profit of $1.26 billion, in line with upgraded guidance.
Occupancy rates reached 97.2 per cent and Mr Steinberg backed the high-flying Sydney office market to outperform for another two years and commercial property values to keep rising.
La Trobe already had a presence across 1200 sq m on level 20 of Dexus’ building, which it had fitted out in 2012.
Not to be outdone, Melbourne University has snapped up 6528 sq m across five levels in a B-grade building at the northern edge of the city.
The university is understood to be using the offices at 333 Exhibition Street as educational spaces.
RMIT, too, has been an active player. It is understood to be considering fulfilling a requirement for 10,000 sq m in another Dexus-owned building, the QV office towers at 222 Lonsdale Street.
The university’s main city campus is just a block away along Swanston Street.
“For some time RMIT has been in the process of identifying approximately 10,000 sq m in order to consolidate a number of leases set to expire between 2019 and 2020. At this time no deal has been struck, although commercial discussions are ongoing,” an RMIT spokesman said.