Australia’s industry super fund-backed asset manager ISPT has won the rights to partner with Victoria University to develop a campus worth up to AUD800m (€506.7m).

The University said ISPT will develop the City West Precinct vertical campus on the edges of Melbourne’s central business district.

Daryl Browning, ISPT CEO, told IPE Real Assets that the University wanted a more modern campus and that ISPT had begun talks 18 months ago to put together a commercial agreement.

This cumulated in the University selling the site, which consists of a cluster of buildings, including Victoria’s Former Records Office and Land Titles Office, both in Queens Street, and the Victoria University Tower site in Little Lonsdale Street to ISPT this week.

Browning said the first phase of the project would be a 32-storey vertical campus. At a later stage, a number of heritage buildings surrounding the main building would be redeveloped to make up a new campus for the tertiary institution and its related colleges.

Browning said the end value of Stage One would be in the vicinity of AUD350m to AUD400m, and, if it was decided to proceed with stage two, this would also have a potential value of AUD350m to AUD400m.

Victorian government approval for the deal was provided on the basis that Victoria University sets up a ‘New Infrastructure Fund’ in its accounts to hold the proceeds of the sale for reinvestment in new infrastructure.

Victoria University vice-chancellor and president, Peter Dawkins, said an infrastructure fund would be established to enable investment opportunities for the University’s campuses “in our heartland throughout the west of Melbourne”.