Universities as asset class: private sector investment in property for universities

Drawing on cases from Australia, we argue that property for universities has emerged as an asset class that appeals to a range of investor/owner types, including listed Real Estate Investment Trusts (REITs), unlisted direct property funds, and private developers. The emergence of property for universities as an asset class is driven by, on the one hand, universities looking to finance development in the context of reduced state funding and the marketisation of tertiary education, and, on the other hand, private sector capital looking for new investment opportunities. Established research has explored the logics and strategies of universities in engaging in land and property transactions, often in partnership with private sector investors or developers; however, less attention has been placed on the objectives and actions of private sector stakeholders. Drawing on interviews with investors, developers, and senior university staff, we address this gap in three ways. First, we examine how, within the context of COVID-19, private sector stakeholders mobilised to position property as a solution to the financial tumult facing universities, simultaneously seeking to create new spaces for investment. Second, drawing on several developments undertaken for Western Sydney University, we reveal a diverse set of property, ownership, and financing arrangements that mediate property for universities as an investment asset. Third, we explore the appeal of property for universities as an asset, revealing a series of benefits for investor and developer owners that coalesce around three themes: rent, risk, and reputation.