Written by Andrew Vines
In Sydney CBD, education approved premises for lease are in short supply. This has resulted in education groups seeking alternatives and opportunities to become owner occupiers.
Burgess Rawson have just sold Level 6, 8 Quay Street Haymarket to a private college. The 864 sqm strata lot does not currently have approval for education use, however the purchaser is seeking to convert the property to use for educational purposes. 8 Quay Street is popular among education groups with UTS and another private college already occupying the building.
The property sold for $5,800,000 ($6,750/sqm) which is a record price for an older building in the area, being almost 30 years old. Since the late 1980s the property had been used as a medical centre and was sold without formal DA approval in place for the conversion into a college.
According to marketing agent Andrew Vines “the property received strong enquiry with over 20 inspections and 8 offers. The majority of interest was colleges seeking to buy their own premises.”
He went on to say that “with the education industry backed by the Federal Government Education Initiative to increase student numbers up to 1,000,000 per year, private education groups are strategically moving into the strata office market to purchase space given their difficulty in leasing education approved spaces.”
Another property Burgess Rawson has recently sold and will be used as a college was Level 7, 451 Pitt Street. The 600 sqm strata lot sold for $5,105,000 ($7,800/sqm) which was a record for the building. With DA approval for college use in place the purchaser had already leased the premises to a college prior settlement.
Currently on the market is Level 4, 451 Pitt Street, with a lease to a private college until Dec 2018. The floor comprises of approx.1,135 sqm of space that has DA approval for education uses. Investors will have the opportunity to capitalize on the education market with a safe commercial office investment in a market of low supply and increasing rents. Education groups will also have keen interest in the property with the ability to become owner occupiers after the lease expiry. Mr Vines believes the property will sell for over $8 million and expects strong demand by investors and future owner occupiers.
To learn more about the Sydney strata office market or to receive a property report for Level 4, 451 Pitt Street please contact Andrew Vines on 0423 108 880.