Universities as investment products: exploring private sector engagement in university property

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Driven by increased global competition, desires to simulate economic performance, and government initiatives encouraging university-industry collaboration, the organisational structure of universities has evolved to an entrepreneurial model. Under a neoliberal policy regime characterised by a roll-back of government funding, universities are pushed to seek alternative funding opportunities. Thus, universities increasingly interact with private sector agents and engage in property and urban development activities to upgrade and maintain education and research infrastructure, which subsequently opens up new forms of investment for private sector. Thus, the process of financialisation has had profound effects on university governance. Financialisation refers to ‘a pattern of accumulation in which profits accrue primarily through financial channels rather than through trade and commodity production’ (Krippner, 2005, p. 174).
Drawing on fieldwork in New South Wales, this paper explores the motivations and mechanisms of private sector actors that invest in university property. Through auditing policies and media reports, and conducting interviews with key stakeholders, we have found developers and institutional investors (Real Estate Investment Trusts) are engaging with university property through 1) building new, typically, vertical campuses in desirable business districts and renting space to universities for long-term return; and/or 2) partnering with universities to co-develop and co-own specific facilities. By either constructing ‘built to rent’ office buildings or establishing development partnerships with universities investors: secure universities as reputable anchor tenants with long-term leases; enjoy lower construction costs when partnering universities; benefit from alternative planning and assessment pathways; diversify investment with low-risk and long-term university property assets in their portfolios; and, extend their reputation. The paper contributes to financialisation literature and understandings of university finance and development, by examining impetuses and mechanisms for private sector investment university property.
Period7 Jul 2023
Event titleThe Annual Institute of Australian Geographers Conference (2023): Coexistence, Collaboration and Geography
Event typeConference
LocationPerth, AustraliaShow on map