Industry Superannuation Property Trust will acquire three Melbourne CBD sites from Victoria University and build a 32-level vertical campus which will be leased by the college for 30 years.
ISPT announced today that it was awarded the tender to partner with VU and the Victorian Department of Education and Training.
The proposed new building, VU Tower, will offer 24,000 of teaching space and offices at 364-378 Little Lonsdale Street, a site Victoria University acquired for $3.1 million in 2001.
ISPT will also buy two neighbouring heritage listed properties from the college: the Former Records Office at 287-295 Queen Street and the Land Titles Office at 247-283 Queen Street.
Construction of VU Tower is expected to begin next year and be completed by 2021.
Victoria University vice-chancellor and president, Professor Peter Dawkins said: “We are fortunate to be partnering with ISPT on this project which will help us to create a world-class precinct for our students in the CBD, while also establishing an infrastructure fund to enable exciting investment opportunities for our campuses in our heartland throughout the west of Melbourne.”
ISPT chief executive officer Daryl Browning said: “We look forward to working collaboratively with VU to ensure we deliver a new campus and educational environment that meets the current and future needs of staff and students, while creating an architectural statement befitting the prominence of the site in a CBD context.”
“The transaction demonstrates the long-term capital alignment of industry superannuation funds with the tertiary education sector.
“This project is a key addition to our development pipeline and represents an important milestone in our participation into the education sector. Education is a major services export contributor, critical to the economy over the medium to long term, and this project will diversify our exposure and that of our Investors to this important sector.
“Education uses are a key part of ISPT’s investment strategy and we are pleased to be partnering with Victoria University and the Department of Education and Training to create a landmark knowledge precinct in Melbourne CBD.
“This is an exciting opportunity. It aligns with our core values and investment strategy of acquiring and developing quality investment grade assets with strong income security for long-term ownership.
“Our partnership approach provides our customers with confidence knowing that our goal, the optimum long-term performance of the asset, is aligned to the long-term success of their businesses,” said Mr Browning.
VU Tower is ISPT’s fourth development proposal for the Melbourne CBD. Its other projects include 271 Spring Street (which will be Australian Unity’s next headquarters). It is also co-developing an offices at 447 Collins Street with Cbus Property Fund. Another commercial building is under construction at 405 Bourke Street. A joint venture with Brookfield, this office is pre-committed by the National Australia Bank.