Melbourne, RMIT muscle in as property heavyweights
We have a series of things important to us ... in how we develop. Margaret Gardner, RMIT
Buildings owned by the city campuses of the two institutions account for a total floor area of 1,034,000 square metres, equivalent to 13 times the size of Melbourne's tallest office tower, the Rialto, BusinessDay research shows.
But for all its size, Melbourne's expanding knowledge industry is often overlooked as a property heavyweight. The CBD's education sector is forecast to grow 7 per cent over the next five years, according to Knight Frank research. That does not include broader expansion in the larger metropolitan area.
The growth is set to consolidate the state's universities and related research industries as some of the largest land owners and occupiers in the CBD and Carlton precinct.
Melbourne University's holdings in Carlton and Parkville include 74 buildings on its original campus bordered by Royal Parade, College Crescent and Swanston and Grattan streets, as well as a further 101 buildings outside it.
RMIT owns at least 68 buildings on its city campus spread over 8.2 hectares. It comprises a significant 6 per cent of Melbourne CBD's size, vice-chancellor Margaret Gardner said.
And it's not stopping there.
While not looking externally for development opportunities, RMIT has plans to build on vacant land behind its Swanston Academic Building, although it is tight-lipped about what will go there.
"We have a series of things that are very important to us in terms of how we develop our footprint in the city," Professor Gardner said. They include being driven by design quality, sustainability and "trying to contribute to the life of the city", she said.
As overseas student numbers start to pick up, the two university titans are not the only ones expanding. The city's Argus building will be turned into a private university campus by Melbourne Institute of Technology founder Shesh Ghale under a $60 million redevelopment.
Mr Ghale, who bought the site from La Trobe University in 2010, expects MIT students to move into the building in mid-2014.
Other Melbourne-based educational institutions leased more than 20,000 square metres of CBD office space in the past two years and are expected to occupy a further 10,000 square metres in the next year, Knight Frank said.
Over and above the real estate owned by the universities, education-based tenants (pre-school, tertiary and adult) take up about 10 per cent of Melbourne's CBD office stock. They will occupy a total of 315,000 square metres by the end of the year, research director Richard Jenkins said.
That is because about 4.5 per cent of Melbourne's CBD white-collar workers are employed in the education sector, the largest proportion of any Australian capital.
By comparison, education accounts for 1.9 per cent of Sydney CBD employees and about 2.5 per cent of Brisbane's, he said.
La Trobe University recently committed to 1242 square metres at 360 Collins Street, Navitas took 2700 sq m at 123 Lonsdale Street, Deakin University has 3008 sq m at 550 Bourke Street and Monash College 7710 sq m at 222 Bourke Street, according to Knight Frank commercial leasing director Hamish Sutherland.
But the expansion may not prove a bonus for the City of Melbourne. Universities are generally exempt from paying local government rates.