University of Melbourne pays Australian Red Cross c$46 million for Carlton offices

The University of Melbourne outbid 17 groups – a mix including private and institutional heavyweights – to acquire two neighbouring Carlton offices near its Grattan Street entrance.

Opposite Lincoln Square, vendor Australian Red Cross was expecting to reap about $40 million from the disposal.

Instead, it is banking a speculated $46 million – a price which values every square metre of land at about $22,600.

Colliers International’s Daniel Wolman, Trent Hobart, Guy Wells and Oliver Hay with CBRE’s Josh Rutman, Mark Wizel, Julian White and Lewis Tong, and Matthew Berg from Partner Developments, as transaction manager, listed 163-175 Bouverie Street and 147-155 Pelham Street in October.

Their expressions of interest campaign closed on November 22.

The sites are about 500 metres north of the CBD.

ARC relocated functions formerly undertaken at Carlton to another owned premises at 47 Villiers Street, North Melbourne.

Earlier this year it announced a national property divestment program – also listing in October a three-storey office in Brisbane’s inner west Milton.

In October, ARC also listed Humanitarian Place in Brisbane’s inner west Milton.

The Carlton properties: 163-175 Bouverie Street and 147-155 Pelham Street

The University of Melbourne and Royal Melbourne Institute of Technology are active Carlton purchasers and developers.

It is folklore amongst agents that the schools have an understanding: the former competes for sites north of Queensberry Street, and the latter for those, south.

The neighbouring ARC properties – both modern, low rise offices – cover a 2038 sqm Capital City 5 zoned site with 40.5 metres of Lincoln Square frontage.

They are also half a block from University Square.

It is expected the college will redevelop the sites with something taller.

In the immediate vicinity, University of Melbourne owner-occupies several offices and campuses, is building a student accommodation complex with billionaire Paul Little – and holds the Prince Alfred Hotel.

The Parkville train station, part of the state government’s $11 billion Metro Tunnel project, is under construction in the area (on Grattan Street, between Elizabeth and Leicester streets).

Universities used recent downturn to buy sites

In April – two months before the trough in the local property cycle – Swinburne University spent $45 million on Invicta House at 226-232 Flinders Lane in the Melbourne CBD.

The college plans to owner-occupy the seven-level building, 20 metres from Swanston Street and a block from the Flinders Street station.

In March, University of Queensland paid $19.3 million for a five-level office at 74 High Street, Toowong, for its administration staff to occupy while buildings at its nearby main Brisbane campus, at St Lucia, are renovated.

Last week, the same school paid $47.4 million for the 130-year old sandstone Chambers building and an adjoining A-grade office in the Brisbane CBD – assets which hit the market in August asking $50 million.

…and announced some landmark developments

Fourteen months ago, La Trobe University unveiled a $5 billion master-planned redevelopment at its Bundoora campus – about 16 kilometres north of the Melbourne CBD.

The mixed use project will see residential property developed on the site (all up some 12,000 people are expected to live there).

It will also include offices, shops, community space (including a town centre) and a hospital – around new education facilities.

Last November, Victoria University announced a joint venture with Industry Superannuation Property Trust which will see the construction of a 32-level, 24,000 sqm vertical campus at 364-378 Little Lonsdale Street.

VU is selling this building, and two neighbouring properties to ISPT as part of the agreement.

In May, the University of Melbourne and husband and wife business identities Paul Little and Jane Hansen broke ground on a 14-level, $110 million student accommodation complex.

Branded Little Hall, part of the revenue the school derives from this 669-dwelling complex will fund the Hansen Scholarship, which has an annual intake of 20.

Outside of Victoria, Charter Hall and Western Sydney University in September announced plans to purpose-build a $350 million education hub in Westmead comprising of three towers with more than 38,000 sqm of total area.

The Carlton sites (outlined) relative to the Melbourne CBD, 500 metres away.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco