Old schools help put $250m in Victoria’s piggy bank

The Victorian Government is embarking on a firesale of surplus sites – including many old schools – to fund its infrastructure projects.

New Zealand’s Ryman Healthcare will turn a suburban Melbourne school, shut down more than a decade ago, into a $100 million retirement village.

The 5.56ha former Brandon Park Secondary College site in Wheelers Hill is the jewel in the crown of the latest portfolio of surplus Victorian Government properties to be offloaded.

It sold for $47.5 million, or nearly twice what was expected, according to Savills agent Nick Peden.

The Brandon Park Secondary College site sold for nearly twice what was expected.

The school, at 6-30 Brandon Park Drive, was in a batch of about a dozen that the state’s Department of Treasury and Finance recently placed with a mix of commercial agents.

Assistant Treasurer Gordon Rich-Phillips has indicated a number of other vacant government sites soon will be up for grabs in a firesale expected to net around $250 million this year alone.

The windfall, which follows of series of other government property sales last year, will be used to bankroll infrastructure building around the state.

Schools among 142,000 surplus sites

Mr Rich-Phillips said when all government departments had been required to identify surplus holdings on their books, more than 142,000 sites were  uncovered – although not all of them were commercially attractive.

So far, the old Brandon Park College sold last week by Savills has been described  as the stand-out.

The agency also hopes to sell the 58,000 sqm former Doveton Secondary College, at 64 to 70 Box St in Doveton this week.

So far, the old Brandon Park College sold last week by Savills has been described  as the stand-out.

The former campus has four street frontages, two of which form boundaries with parkland and a golfcourse, less than 2km from central Dandenong in Melbourne’s south-east.

Agency DTZ will also close tenders this week for the sale of the 1ha Monash Special Development School at 1 Renver Rd in Clayton.

Fitzroys agent Peter Weatherby confirmed the sale of the former Doveton North Primary School on 20,240 aqm at 25-35 Rowan Drive, but said  details remained confidential.

No trouble finding buyers

All of the former Department of Education properties offered so far have been snapped up, with the exception of the 2.2ha  Eumemmerring Primary School at 58 Doveton Ave. It failed to attract interest over $4 million when tenders closed this month but agents Knight Frank said talks were continuing.

Other education department properties that have sold recently are : the 2ha Clayton Primary School at 29 Browns Rd, Clayton, for $11.1 million by JLL; 2ha at 138 Barkers Rd, Hawthorn, by Gross Waddell; the 1.8ha Oakleigh South Primary School at 1-17 Beryl Ave, Oakleigh South, by Melbourne Acquisitions for $13.55 million.

Savills’ Mr Peden, who also last week  sold a disused government warehouse at 191 Rosamond Rd in Maribyrnong, said many of the public assets on the block were in prime locations.

The  private developer who bought the 12,000 sqm Maribyrnong  site for $7.1 million, or $588 per sqm, paid 75% more than the vendor had anticipated, Mr Peden said.

Despite the greater than usual availability of development land thanks to the firesale, the properties were attracting prices beyond expectations.

Despite the greater than usual availability of development land … the properties were attracting prices beyond expectations.

“It is apparent that the levels of suburban infill sites on the market this year has increased significantly, with the majority being government sales,” Mr Peden said.

“Land values are being pushed upwards … instead of typically downwards when this quantity of real estate hits the market suddenly.”

Competition heating up

He attributed the phenomenon to keen competition for each site driven largely by an influx of off-shore based buyers.

Melbourne Acquisitions director Dominic Gibson, who closed the Beryl Ave sale in Oakleigh, said strong interest was coming from Asian property groups looking for residential development opportunities beyond the CBD.

“Asian buyers are looking more broadly to capitalise on suburban opportunities as their cost bases and profit margins are usually much lower  than private and ASX listed developers,” Mr Gibson said.

Among the surplus land earmarked for sale in coming weeks and months are two more schools: the former Sunvale Primary School in Sunshine and Clayton West Primary School, Oakleigh.