Leading international education provider, Study Group, has signed a complex lease transaction for over 6,700sqm in Church Lane. CBRE and JLL jointly negotiated the lease for 9.5 years on behalf of a real estate fund of Credit Suisse AG, which purchased the property in 2008 to undertake direct investments in foreign real estate.
Study Group, who partners with some of Australia’s largest universities, has being looking to co-locate its brands in a new CBD location through their national real estate advisor, Marprop. Study Group’s intension was to reduce their footprint and overall real estate cost, increase their efficiency and create a state of the art education facility. Andrew MacGillivray from Bayley Stuart assisted Marprop and Study Group to locate the property.
The complex deal involved negotiation and signoff from a number of parties, including a surrender of four floors by the previous tenant, the relocation of a subtenant to a new direct lease on an upper floor within the building and the surrender of a ground floor retail tenancy to provide a dedicated point of access for Study Group.
CBRE’s Shane Burns said the transaction highlighted the need for both landlords and agents to think outside the square in order to secure larger tenants. “There were some tense moments, as the withdrawal of any of the five stakeholders would have knocked over all negotiations,” Mr Burns said. “Importantly, despite the number of parties involved, there were sound reasons for everyone to work together to achieve the desired outcome.”
JLL’s Nick Drake said the initial negotiations had been relatively straight forward, but had become increasingly difficult due to changes in size, timing and access concerns. “It became clear that we had to involve more and more groups in order to free up the necessary space, which placed increased pressure on the deal,” Mr Drake said.
“In addition, we had to ensure that the introduction of an education provider would not adversely impact our existing tenants. Some creativity resulted in a dedicated ground floor entry, dedicated lift and internal staircase throughout Study Group’s tenancy to ensure it was a win-win for all parties.”
Mr Burns added, “Overall it was a great result; the landlord has secured a high quality tenant on a long term lease, the subtenant has achieved a longer, more secure tenure for its administration department and the former major occupier has relinquished an unnecessary lease legacy. All documentation was agreed and executed on the same day, underscoring the appetite for quality education space in Melbourne.”