Perth is rapidly cementing its status as a major destination for students, with a wave of education and training providers securing space in the city centre. This surge in demand comes as the highly anticipated Edith Cowan University (ECU) city campus prepares to open its doors.
Education Sector Fills Vacant Office Space
Property expert Matt Lutman from Knight Frank has been at the forefront of this shift, finalising five leasing deals with education providers this year alone. These agreements cover nearly 6000 square metres across three different buildings in the Perth CBD. According to Lutman, the demand is far from satisfied, with educators actively searching for at least an additional 12,000 square metres of city space.
This trend is providing a much-needed boost to Perth's struggling secondary office market, where the vacancy rate sits at a high 20.2 per cent. In contrast, prime office assets have a vacancy rate of 15.3 per cent. Lutman points to the upcoming ECU campus as a key catalyst, enhancing Perth's appeal as a student city alongside growing accommodation options and robust public transport links.
The 9B Certification Driving Change
To attract this new breed of tenant, many landlords of older 'B-grade' office buildings are investing to obtain Class 9B certification. This certification verifies a building's safety, compliance, and suitability for use as a classroom. While the conversion cost can reach around $250,000 for a 1000sqm space—covering upgrades like extra toilets, improved air-conditioning, and wider staircases—it is proving a worthwhile investment.
"Long-vacant buildings are getting a new lease on life as classrooms," Lutman said, citing one example on Mount Street that had been empty for three years and is now being leased to an education provider.
Greg McAlpine, a colleague of Lutman's, noted a clear preference for spaces with existing 9B approval due to the cost and complexity of conversion. "A number of landlords in Perth are now considering a use conversion to education, given the demand," McAlpine stated.
Major Deals Signal Strong Confidence
Significant leases are already demonstrating the scale of this movement. At 10 William Street, a six-level building with 9B classification on most floors, three major deals have been signed:
- Kaplan has taken 2560sqm over five floors.
- Idea Academy has leased 560sqm on one floor.
- Strategix has leased 560sqm on one floor.
Interest remains high for the final available floor in the building. Elsewhere, the Crown Institute of Higher Education has leased a 1150sqm, two-level space at 1325 Hay Street in West Perth. This follows other recent commitments, such as ILSC taking 1500sqm at 150 St Georges Terrace.
Narayan Tiwari, Chief Executive of the Crown Institute, explained his organisation's expansion into Perth's CBD was driven by identified student demand. He highlighted that Perth's designation as a 'regional' area for skilled migration is a major drawcard, offering students priority visa processing and a potentially quicker pathway to permanent residency.
"Student visa approvals are generally higher for regional areas compared to metropolitan locations," Dr Tiwari said. However, he also pointed to challenges, including students finding part-time work and rental accommodation, which could impact recruitment goals of around 300 students per year.
Enquiries are flowing from both established local operators seeking to upgrade or expand and new entrants to the Western Australian education market. With attractive rents and incentives in the CBD and fringe areas, the move to the city centre is becoming increasingly compelling for the education sector, fundamentally reshaping parts of Perth's urban landscape.
