This article is from the Australian Property Journal archive
IMPENDING federal legislation that will cap international student enrolments has prompted Stanley College to offload a Perth CBD building that it settled on less than a year ago for $21 million.
Stanley College picked up the six-storey, 4,248 sqm building at 10 William Street in a bid to accommodate the unprecedented growth in international student numbers. International student numbers in Australia leapt from around 580,000 prior to COVID to 713,000 earlier this year.
At the time, Stanley College president Alberto Tassone said the purchase was a “great opportunity to secure a long-term home in the Perth CBD, as well as a strong investment asset for the future of the College”.
However, in May the Albanese government introduced a bill to Parliament that would give Education Minister Jason Clare the ability to set a maximum number of new international student enrolments for courses and providers. Universities would need to supply new purpose-built student accommodation to enrol more students.
Stanley College has now decided to put the building back to the market.
10 William Street has an occupancy of 75.5% and a weighted average lease expiry of 2.69 years. All tenants are educational institutions – namely US-based educational provider Kaplan and the Anglican Schools Commission – with most floors currently having a class 9b building classification, suitable for educational facilities such as schools and universities.
The building is on a 1,560 sqm site, with secure open parking at the rear for up to 30 cars.
Knight Frank’s Tony Delich and Zach Schreier have the listing. The agency managed the property’s sale last year.
Interest is again expected to come from education providers, “however we believe there will be keener interest from local, interstate and international syndicates and developers this time around,” they said.
Delich said the property represents a unique opportunity for investors and developers, situated on “one of the last remaining development sites in the core of the Perth CBD”
He said the current overhaul and impending implementation of the City of Perth’s new City Planning Scheme No.3, means significant increases in base plot ratios across the CBD are to be expected, with 10 William Street expected to see its base plot ratio increase from 6:1 to 11:1, plus bonuses.
“With the successful transformation of Elizabeth Quay nearing completion, the attractiveness of nearby properties will be enhanced significantly. 10 William Street is perfectly situated between the core of the CBD and the new Elizabeth Quay and will no doubt benefit from this urban expansion,” he said.
Schreier said the property offers “enticing investment metrics”.
“It’s a stable investment that should yield well in the medium term with above market rents, bolstered by the 9b classification and robust educational tenant covenants together with huge increase in plot ratio.
Minimal base building capex is required in the short-to-medium term, following comprehensive base building upgrades that amounted to about $2.5 million.
Expressions of interest close on Wednesday, 28th August.
Perth recently saw its first office transaction on the Terrace in more than 12 months, with the sale of 181 St Georges Terrace for $26.5 million to Japanese company Yamamoto Realty.
