Sydney real estate: Schools go on a $100 million buying bonanza

Some of Sydney’s most expensive private schools have emerged as the most prolific home buyers of the post-pandemic property boom, as the schools look to their next door neighbors’ homes to meet their expansion plans.

Landlocked schools Ascham and SCEGGS Darlinghurst in the eastern suburbs, and Newington, Meriden and Christian Brothers’ High School in the inner west have clocked up close to $20 million worth of residential real estate purchases between them in the first six months of this year alone.

And at the height of Sydney’s property boom last year, when the median house price soared more than 33 percent, schools like Queenwood, Pittwater House, Emanuel School and Barker College forked out more than $56 million on property.

On top of that, Sydney Catholic Schools has bought nine houses in the past 18 months adjoining primary schools in Botany, Arncliffe, Bexley, Lurnea, Auburn, Concord West, Strathfield and Revesby at a cost of $24 million.

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A Darlinghurst terrace bought by SCEGGS recently for $2.9 million is set to be a well-being hub. (SMH/Domain)

Of the almost $100 million worth of property purchases in the past 18 months, the vast majority are houses on the school boundary to be land banked for future use.

“Space limitations have been a challenge for longer established independent schools in the inner suburbs of Sydney for some time,” said head of the Association of Independent Schools of NSW Dr Geoff Newcombe.

Because independent schools do not have the benefit of being able to compulsorily acquire properties when they need to expand, as government agencies can, Dr Newcombe said, “sound forward planning therefore dictates that growing schools must purchase adjoining properties when they come up for sale and pay the market rate.”

Even at market rate, the cost of buying up the neighbors isn’t cheap for schools like Ascham in Darling Point, where the median house price is $4.2 million.

Despite that, Ascham has been on an acquisition spree. In the six months to March records show the school paid $18.24 million to buy five of six apartments in the art deco block next door, leaving one apartment outstanding.

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Schools property real estate Sydney Domain Title Deeds
Ascham now owns two of three retail outlets that front New South Head Road, with the Ho family retaining the one beside the school’s main entry gate since 1989. (Janine Barrett/SMH)

Of a row of three retail outlets that front the school to New South Head Road, one was purchased in 2019 and another last year for $5.25 million, leaving the third in the hands of Hong Kong’s Ho family.

“When you list a house that’s near a school the first buyer you take it to is the school,” said Alexander Phillips, of PPD, who last year sold a Victorian Italian mansion called Villa Palmyra for $5.25 million to St Catherine’s in Waverley.

A spokeswoman for St Catherine’s said they are still considering what to do with the grand 1888-built residence, but purchased it because land is limited and buildings close by are useful for non-teaching purposes like administration and uniform shops.

Phillips said St. Catherine’s paid market value for Villa Palmyra, but that schools often end up paying over.

Lewisham’s recent sale of a freestanding house on 650 square meters for $4.2 million shocked local property watchers, until settlement revealed the buyer was the Christian Brothers’ Trustees of Edmund Rice Education Australia.

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“Nothing has sold for more than $4 million in Lewisham outside the grand Victorian homes on The Boulevarde,” said Shad Hassan, director of The Agency Inner West.

“People who own next door to these sorts of schools usually know what they’ve got and are hanging out for these sorts of deals.”

A pink corner terrace in Darlinghurst was recently bought by one of the state’s most expensive schools, SCEGGS Darlinghurst, for $2.925 million for use as a well-being hub and to accommodate school counselors.

Head of school Jenny Allum announced the purchase in the June school newsletter: “As a property with an entrance and driveway in St Peters Street, we have long considered this one of the most strategic properties around us.”

In Mosman, Queenwood forked out $8.4 million to buy a period house next door to its Balmoral Beach grounds, and Mosman Preparatory bought a Federation house for $4.4 million, funded in part by the sale of a house two doors up for $3.21 million.

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Schools property mansions Sydney Domain
Villa Palmyra is a Victorian Italianate residence bought by St. Catherine’s in Waverley for $5.25 million. (SMH/Domain)

Barker College, a co-education Anglican school set on 15 hectares on the upper north shore, bought two retail spaces next door for $3.63 million and $2.5 million.

“There are no current plans to use the properties recently acquired for teaching,” said head of Barker College Phillip Heath, although one is being considered as space for staff.

Newington College’s Stanmore campus is set on 10 hectares in the inner west, a footprint that has been increasing since the mid-1990s, when the school began amassing 15 of the 19 homes that back onto it on Middleton Street, of which the most recent was a rundown bungalow in April for $2.175 million.

But it isn’t just Sydney’s most expensive schools looking to expand. Muslim co-educational school Al Sadiq, where school fees start at $2400, recently bought a three-bedroom weatherboard house for $1.25 million adjacent to its Greenacre campus.

And the Bankstown campus of Islamic Al Amanah College has bought five of its neighboring properties in the past decade, of which the most recent was a block of land for $1.5 million.

Hopes are already high that Al Amanah will add a sixth to its parcel on August 20 when a four-bedroom house next door goes to auction with a $1.1 million guide, given Pace Property’s Luke McFadden said the school had already flagged its interest.

This exclusive story first appeared in Title Deeds on The Sydney Morning Herald.

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