Wave Of Growth In Education Sector Propels Melbourne Office Market

A wave of growth in the education sector is underpinning increased activity in Melbourne’s office market, with Skills Training Australia the latest provider to secure a presence in the CBD.

Skills Training Australia has signed a five-year lease on 1,051sqm across levels 14 and 15 of 459 Little Collins Street.

The property comprises 15 levels of commercial office space, retail on the ground and basement car parking.

CBRE Associate Director Office Services Mark Bolis said the deal was evidence of strengthening demand from education providers looking to acquire a footprint in Melbourne’s CBD.

“Australia’s education sector has undergone a major growth period, with foreign students increasingly attracted to our quality education system, high standard of living and favorable economic conditions,” Mr Bolis said.

“Melbourne in particular has emerged as one of Australia’s most sought after education destinations, highly regarded for its status as the ‘World’s Most Livable City’ and its premium universities, including the University of Melbourne and Monash, which are ranked in the top 100 globally.

“This demand is inevitably filtering through to the office market, with training providers increasingly looking to CBD and suburban markets to gain a presence.”

As further evidence of this demand, Mr Bolis is currently negotiating leases on a number of other sites with other educational providers.

“We are seeing more operators looking for space in the CBD, competing with your traditional office tenants in the market,” Mr Bolis explained.

CBRE Research shows over the past 18 months, the number of leases signed to education providers in the Melbourne CBD has more than doubled from 5 per cent (20,000sqm) to around 10 per cent (45,000sqm).

In 2014, close to 36,000sqm in education lease deals were completed – a 44 per cent increase from 2013.

CBRE Research Analyst Anne Flaherty said Australia was the third most popular international study destination, with Melbourne ranked Australia’s second most sought after study hub behind Sydney.

Despite this however, Melbourne has the highest proportion of international students, at more than 30 per cent, Ms Flaherty explained.

“Part of Melbourne’s appeal when compared with Sydney is the lower cost of living,’” she said.

Ms Flaherty went on to say the education sector was emerging as one of the strongest growth pockets of the economy, accounting for more than 16,000 new jobs in Victoria alone over the past five years.

“University enrolments are rising on average 4 per cent per year, with domestic university enrolments exceeding one million for the first time in 2014 and the number of international students commencing study was up 10 per cent over the previous year,” Ms Flaherty said.