Friday, April 19, 2024

Property sale to aid Massey’s financial woes

Neal Wallace
$30m Massey deficit to be addressed through divestment.
Reading Time: 2 minutes

Massey University could halve its physical footprint in the coming years, including selling 25ha of surplus farmland to address its financial issues.

Shelley Turner, the Deputy Vice-Chancellor of University Services, said it expects to report a $30m deficit this year but will financially breakeven in 2026 and part of that financial turn around will come from “strategically” managing property across its three campuses.

Any sale of land or buildings will follow a divestment process which is expected to begin later this year and continue for two or three years.

Turner says the university has a divestment schedule on which land and buildings are added or removed depending on the needs of the university or opportunities that are presented.

“The schedule identifies land and buildings that have been deemed surplus to requirements, for example, buildings or land that are currently not being used by staff or students for education related purposes.

“Massey Farms consist of over 2000ha in total, and the farmland identified on the divestment schedule is around 25ha so just over 1%.”

The sale of any part of university farms has to be determined as surplus and provide a beneficial commercial outcome for the university.

“This will not adversely impact farm operations, student training or research,” said Turner.

The university has significant land and property holdings and no debt.

“This is a strong position to be in, compared to other NZ universities, but initial investigations suggest we could reduce our physical footprint, while maintaining our current operations.”

Owning buildings incurs significant overhead expenses.

“Through the university undertaking spatial needs analysis and reducing our physical footprint by up to 50% over coming years, we can significantly reduce our operating expenditure,” she says.

It can do this by consolidating teams into existing buildings that are fit-for-purpose, selling or leasing buildings and land that are currently not being used or sub-leasing buildings to commercial entities for dual use, which it is already doing.  

“The university will continue to consolidate our operations, and therefore the space it needs to operate. When space is deemed to be surplus it will be assessed to determine its most appropriate future use.

“It’s expected this work will continue for the next two to three years.”

Correction: This article previously stated that Massey University will break even in 2024. It has been updated to reflect the correct year, 2026.

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