Are Universities the new urban centre?
The university sector was hit particularly hard with covid. Universities have long relied on income from international students which was profoundly impacted by our covid zero policy. For so long, universities have relied on income from international students as a main source of revenue as education funding for the sector diminished. In the era of the pivot, where every business must change and adapt to survive, there is an increasing trend of universities as property developers. You can see indicators of this trend, the latest joint venture between my alma matter and Western Sydney University.
THE NEW WESTERN SYDNEY CAMPUS
Western Sydney University and Penrith City Council have recently announced a joint partnership to build a new campus 5kms from the Penrith city centre. This joint venture with Stockland will include a mixture of university space, a town centre with arts, cultural facilities and residential facilities. This is not the only university that is currently undertaking a project of this size and scope. Universities acting as property developers and/or working in partnerships or joint ventures is becoming increasingly common across the sector. The trend is prevalent in institutions across the country from Perth’s Edith Cowan University.
VERTICAL CBD CAMPUSES
Edith Cowan University is investing 300 million in a joint venture with the federal government to relocate its suburban campus to the Perth CBD as part of a ‘vertical CBD plan’. This trend, integration of university campuses into the CBD from the suburbs is being developed by several universities including Charles Darwin University and the University of Tasmania. Research of students’ facility preferences shows that students favour universities with the combination of space and amenities such as cheap restaurants. The rise of so-called ‘Mixed-use developments’ is all the rage in the commercial retail sector (CRE).
WHAT IS A MIXED-USE DEVELOPMENT?
Mixed-use development is nothing new in the realm of commercial development, but it really has taken on a new life within the last 2 years. Technically, mixed-use refers to spaces that have more than one use, such as a residential apartment block with a convenience store below. Suburban shopping centres were one of the major beneficiaries of our "work from home" lifestyle that has come about recently. This phenomenon has been felt all across the sector, with Brad from JLL noting that they've had strong returns right across their portfolio.
Think about it like this - the pandemic has reminded us of how precious our life and time is.
We went from spending hours driving to and from work to zooming into work in our PJ’s. It's like comparing chalk to cheese. More and more consumers are prioritizing convenience when they are making purchasing decisions. A university degree is one of the largest consumer purchases that one makes in their life, even if it is for a positive debt. Accordingly, universities are at the forefront of the mixed-use development process.
THE FUTURE of MIXED USE
Universities can offer the trifecta of mixed-spaced development as suburban universities tend to have what all these projects need – open spaces, amenities and transport options. By universities leasing out their unrealised spaces to businesses it has the advantage of being an additional revenue stream for the campus. Indeed, Wollongong University has just announced 175 commercial tenants on its 36-hectare campus with an aged care facility in partnership with Lendlease. As mixed-use developments continue their prominence as we all use our recaptured time to live more productive and fruitful lives. Think about the time we saved on our commute by Zooming during a lockdown? SAAS software goes hand in hand with CRE as platforms like Asseti, can save time by providing you with real-time visual pictures of your assets. Instead of driving to your site – you can just log in to your computer.
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