University Property Portfolio

Institutional mergers and historical donations have left some of the UK’s universities with valuable real-estate assets that can easily be converted to acquire modern-day commodities.

We are all aware of the huge potential benefits of property investments in recent years and, in the last decade or so. Universities are often prolific property owners in their own towns and cities, owning further estates in addition to the buildings needed for education and accommodation. We look at the pros and cons of university property portfolios, focussing on Manchester Metropolitan University (MMU), which, perhaps unassumingly, has one of the largest property portfolios in Europe with an estimated value of £450 million.
The benefits of dealing in bricks and mortar are abundant. As such, ownership of a property portfolio in addition to the university sites themselves is a valuable asset. So, are more and more universities going down this route in the name of ‘a sound investment’ or is it more an indicator that times in Higher Education (HE) are tough and that a call for positive action is needed?
Ann Fenton, Spokesperson for MMU, explains: “The main reason for the University’s large portfolio is because MMU has its origins in Manchester Polytechnic, which was created in 1970 as a consequence of a merger of three existing colleges – John Dalton College of Technology, Manchester College of Art & Design and Manchester College
of Commerce.
“Further mergers with HE institutions across Manchester and Cheshire continued over a period of more than 20 years and included the incorporation of Hollings College and Didsbury Training College in 1977, as well as the City of Manchester College of Higher Education in 1983. Crewe and Alsager College of Higher Education joined as a faculty in 1992, and this coincided with Manchester Polytechnic being granted university status and evolving in to MMU as it is today.
“MMU itself is located on seven major sites, of which five are in central Manchester and two are in Cheshire, In addition, there are some detached halls of residence and sports facilities. MMU owns all of the buildings on the seven campuses, which is equal to a total floor area of 304,000m2.”
The costs for upkeep of the properties sheltering under MMU’s sizeable umbrella are predictably high and come in at around £18.5 million a year. This includes an in-house facilities-management team that runs the buildings, external estates management, rates, insurance, energy, sewerage, cleaning and repairs. Offsetting this seemingly overwhelming expense however, is the regular income that a property portfolio of this size and variation offers.
Large portfolios can also be a source of revenue to fund new projects or buildings. MMU is currently in the process of selling off several of its estates including facilities at Alsager that are being sold to create a bigger and better site at Crewe, which is to include a new £30-million arts centre. Aytoun is being sold because a new £65-million Business School is currently being built. Elizabeth Gaskell is being sold because the Faculty of Health, Psychology and Social Care is merging with the Institute of Education, based in Didsbury. In addition to these developments, MMU is also currently exploring the possibility of building a £90-million campus in Hulme to house both the Elizabeth Gaskell and Didsbury faculties. If this all goes ahead, Didsbury will also be sold. Hollings is being sold as the faculty is moving into premises at the new £42-million John Dalton extension.
The incredible benefits of a large property portfolio are therefore evident, however, as far as dealing in property simply as a form of income and profit. This is an area of which Fenton is vehemently protective. She says: “As part of our estates strategy to both consolidate campuses and improve our facilities, MMU is currently selling off a number of estates (as detailed above). However, the university will be replacing everything it is selling and all money made from the sales is being re-invested in new buildings and facilities. It is not simply a ‘money-making’ campaign.”
So a university’s property portfolio is more than space to educate. It is an investment and leverage for future projects.