This article is from the Australian Property Journal archive
AS travel restrictions freeze international student movement across the globe and universities across Australia face heavy financial hits, RMIT is hoping to release $120 million of capital by offering its Bourke St tower in the Melbourne CBD with a leaseback.
The 14 level building at 235 Bourke St has 23,014 sqm of office and teaching space and has been refurbished in recent years.
RMIT has appointed CBRE’s Kiran Pillai, Mark Coster, Scott McGlone and Stuart McCann with Gross Waddell’s Andrew Waddell, Raoul Salter, Michael Gross and Danny Clark to manage the expressions of interest campaign.
The university was slated to face an $853 million fee shortfall by researchers at the University of Melbourne’s Centre for the Study of Higher Education, due to the loss of lucrative international student fees as a result of the pandemic.
“While our ownership of the property has been regularly reviewed since the completion of the Swanston Academic Building in late 2012, the process has been expedited in light of COVID-19,” RMIT property services executive director Chris Hewison said.
Universities Australia expects $16 billion in revenue to be wiped out between now and 2023 across the country’s tertiary education sector. This week has seen the University of New South Wales slash 493 positions as it looks to claw back a forecast $370 million shortfall, and Monash University announced nearly 277 job cuts in the face of a $300 million revenue hit, despite a deal with the National Education Tertiary Union that saved 190 positions.
Charles Sturt University will cut 145 jobs, while the University of Wollongong, University of Tasmania and Southern Cross University have all been looking to negotiate staff salary cuts in a bid to save jobs, with varying degrees of success.
Hewison said the 235 Bourke St property was outside of its core city campus location and not considered a long-term strategic asset for the University.
RMIT owns the strata lot comprising levels four to 17 and the sale would involve a lease back for five years with options.
Pillai said the building was surrounded by some of Melbourne’s pre-eminent office towers and was set to further benefit from the delivery of the new Town Hall train station.
“The property offers investors a true value-add opportunity in a precinct of Melbourne that is set to go through significant structural change in the near term,” he said. “It offers everything that investors are seeking at the moment, including a strong and secure existing income with significant future upside.”
Waddell said the building’s location at the epicentre of the CBD’s commercial, cultural and retail precincts set to be a key draw card for prospective purchasers.
