Universities’ development challenge
Universities are among this country’s most proactive real estate developers, with property portfolio values putting them in an elite echelon, according to Bayleys’ latest Total Property magazine, which comes out today.
In examining the property credentials of New Zealand’s eight universities, Bayleys found compelling examples of how these institutions are reassessing and reorganising their property portfolios in light of a changing tertiary educational world.
Bayleys’ commercial real estate national director John Church says the infrastructural requirements of New Zealand’s tertiary institutions are immense, given they have to remain attractive and relevant to prospective domestic and international students, and to world-class staff.
“Forward planning for new buildings, research facilities and specialist precincts is a sophisticated process involving exhaustive consultation, examination of global best practice, delicate balancing of budgets and careful execution of construction roll-out to minimise disruption,” Mr Church says.
“The dollars tied up in university property are eye-watering and the downstream economic benefits that universities bring to the New Zealand cities they are anchored in cannot be underestimated.
“Victoria University reportedly pumps more than $1 billion annually into the region’s coffers, while Auckland University claims to contribute in excess of $6 billion to the wider region’s economy.
“That’s significant – as are the spin-offs for other property investors in New Zealand’s university cities as they are able to leverage off the student presence and the demands that this sector of the population has.”
Victoria University of Wellington has significant campus development projects under way, including a new 12,000m2 science teaching and research building on its Kelburn campus and the redevelopment of Rutherford House on Victoria’s central city Pipitea campus.
In Total Property, Victoria’s director of campus services, Jenny Bentley, says demand for student accommodation has been growing significantly at Victoria in recent years. The university has responded by opening a number of new halls providing a total 38,146m2 of extra accommodation space and housing 1210 students.
As with other universities, the challenge of evolving physical structures with the largely unknown impact of online learning is on Victoria’s property radar, along with responses to changing information delivery styles.
“Learning spaces will always be important at universities, despite the growth of opportunities to learn online,” Ms Bentley stresses.
“The main trend is a move away from passive ‘lecturing’ to a more interactive and social form of learning.”
At the University of Auckland, the first phase of development covering just over half of the 5.2 hectare former Lion Brewery site on Khyber Pass Road in Newmarket has been completed, providing the university with state-of-the-art engineering research facilities.
The engineering facility, along with the construction of the science tower on the city campus, represents an investment of more than $300 million.
The university’s website states that to support its strategic growth path, it needs to build/acquire additional space at a rate of about 6000m2 of gross floor area a year for the foreseeable future.
The University of Waikato has a five-storey $20 million-plus law and management building under construction with completion expected late this year. There are no other major projects in detailed planning at this stage.
Massey University has a number of property initiatives under way according to its 2014 annual report. Infrastructure projects approved at the time of that report include the refurbishment of the Palmerston North veterinary tower, refurbishment and strengthening of the main campus’s Sir Geoffrey Peren building, completion of the Albany campus student accommodation block and the seismic-strengthening of all the university’s Wellington buildings.
Massey University is currently selling the land and buildings of its 10 hectare Hokowhitu campus in Palmerston North as it has merged that campus with its Turitea site, where it intends to consolidate its physical presence in the city.
The University of Canterbury is committed to a number of capital development works with forecast completion dates out to 2020 – mainly on its flagship Ilam campus. The budget for these projects is close to $630 million, on top of $438 million spent on facilities since 2010.
Its director of learning resources, Alex Hanlon, says the university is in the middle of a campus master planning exercise – with much of the dialogue a result of the 2010 and 2011 Canterbury earthquakes.
Lincoln University also has an ambitious campus master plan incorporating new teaching and research facilities.
The university’s group manager of corporate services and deputy vice-chancellor, Murray Dickson, says one of the first projects will be a major student centre.
“Significantly, the campus developments will also be tied to the strategic needs of the upcoming Lincoln Hub – a major development project designed as a strategic teaching and research precinct enabling collaboration between industry, research and education,” said Mr. Dickson.
At Otago University, a $650 million priority development plan was approved in principle last year, to be rolled out over the next 15 years.
According to the university’s 2014 annual plan, work scheduled for the Dunedin campus included a new dental school, marine science teaching facility and aquarium, new arts and biomedical research buildings, new facilities for the department of botany, new music facility incorporating a new centre of performing arts, the refurbishment of buildings within the university’s historic precinct including the clock tower and seismic strengthening projects.
Bayleys’ latest Total Property magazine features extended interviews with key people associated with university property initiatives along with a breakdown of property asset registers.
Jody Robb writes for Bayleys Real Estate