Wednesday 01 September 2021

Education Services in the City Fringe

Brisbane's Commercial Leasing market has been quickly growing since the beginning of COVID-19, especially in the City Fringe.  Last year, we saw the Retail sector take off at high speed, especially Food and Beverage, with business owners achieving surprisingly higher than normal sale targets during lockdown with food delivery apps. Towards the end of 2020 and early 2021, we saw huge growth in the office market with large amounts of businesses wanting to move out of the CBD and closer to amenity, and downsize or upsize their office, depending on how they fared the lockdowns.

Recently, it's the education sector that has been heating up, with many private colleges and schools demanding larger spaces. With different industry demands rising and others falling, people are finding themselves either wanting to upskill or change their careers completely. For most colleges, this sort of growth in a short amount of time is unheard of, especially whilst the international borders are closed and the majority of students are domestic.

Over the last three weeks, around 30% of enquiries to our office have been from private colleges in the greater Brisbane region wanting to move closer to the CBD. This is due to the rapid growth and need to be more central to the likes of public transport and student accommodation. 

With vaccination rates on the rise, although no dates are set, many of the colleges and schools are preparing now for international students to come back. This will mean doubling, or potentially tripling their enrolments once again.

Majority of these education providers are coming to us with very similar requirements; around 500-1000sqm of space fitted with classrooms and breakout spaces, onsite parking and ideally a 9B classification already in place. As well, proximity to public transport is a high priority which tends to make most Registered Training Organisations (RTO) gravitate towards the centre of Fortitude Valley and lower Spring Hill where students can walk from Fortitude Valley station.

A lot of these schools are coming from small, independent spaces around 10-20km from the CBD which means the rents they are now committing to are reliant on more enrolments over the next few years. As such, most are on the hunt for a rental incentive over the first 12 months, however, they are looking for longer lease terms of generally around 7-15 years which, for Landlords, is more favourable in these unprecedented times.

 

Surprisingly, in addition to this we are even seeing primary and secondary schools throughout Brisbane become overwhelmed with the amount of enrolments coming through from interstate families. As such, many schools who would generally own and occupy their premises, are now looking to secure leases of around 20-25 years. Fortitude Valley State Secondary College which opened in 2020 has taken on 55% of the overflow of students from schools such as Indooroopilly State High School. Education Queensland are continuously looking for new sites for new primary schools in the immediate Brisbane area to assist in the increasing numbers.

We currently have multiple properties available for lease that would be ideally suited to an independent college or school. For example, 32 Little Edward Street, Spring Hill (pictured) has a current 9B certification, and is gaining a lot of interest, with 90% of total enquiries coming in over the past 3 months from education based tenants.

 

If you are a Landlord and have a premises in the city fringe area with a large portion of vacant space, that is already or has the ability to be education compliant, we have approximately 10 colleges we are currently trying to assist. Please contact our Leasing Team 07 3148 9901 for further information.