University of Tasmania checks out of central Hobart hotels

The University of Tasmania has announced plans to sell off its two Hobart CBD hotels, purchased last decade to meet a surging demand for student accommodation.

The Fountainside Hotel on the Brooker Highway in Hobart.

The University of Tasmania has announced plans to sell off its two Hobart CBD hotels, purchased for millions of dollars last decade to meet a surging demand for student accommodation.

The Mid City and Fountainside hotels, bought in 2018 and 2019 respectively and which at their peak provided accommodation for 174 students, helped UTAS meet demand while the new 422-bed Hytten Hall facility was built in Melville St.

The university paid $23.5m for Mid City and $18.76m for Fountainside, as part of a wider buy-up of CBD properties.

With Melville St opening in 2021, and hotels no longer required for student accommodation in the post-Covid era, the University will put the prime properties on the market on Thursday.

“These hotels played an important role in making sure we could continue to provide studentsmwith affordable accommodation options at a time when the housing market in Hobart was incredibly challenging and new, purpose-built facilities were still some years away,” UTAS Deputy Vice-Chancellor, student services and operations, Craig Barling said.

UTAS bought Mid City Hotel in the Hobart CBD in 2018. Picture: Richard Jupe

The university has not used either hotel for several years.

The state government has leased Fountainside since early 2020 for its Covid response, and then as accommodation for health workers, while Mid City was leased to Vision Hotels in late 2021 and operates as a commercial hotel.

Mr Barling said UTAS could now accommodate 1500 students across the Hobart CBD and Sandy Bay, with the 78 per cent occupancy sufficient to meet expected demand into the future.

UTAS said it would invest the proceeds from the hotels’ sales into upgrading its teaching, learning, and research facilities, particularly in developing IMAS Taroona.

“The University of Tasmania is committed to providing our students, staff and the broader community with the best possible education and research supported by the best possible facilities,” Mr Barling said.

“We have a range of projects to do just this underway including Forestry, the Philip Smith Centre, and the Shed in Launceston, funded with support from government partners and through the issuance of Green Bonds.

“As we look to develop our STEM facilities in the South now the North is finishing, it is important we fund them in a way that supports our learning, research and access agendas through identifying surplus assets rather than diminishing our investments, which play a critical role in funding scholarships.”

In an email to UTAS staff sent on Monday afternoon, Mr Barling said the decision to sell the hotels had also been motivated by forecasts that overseas student number would never return to pre-2020 highs.

“Given the developments in the international student market since Covid, including the Australian government’s recent reduction in student visa approvals, it is highly unlikely that international student demand will return to pre-Covid levels,” Mr Barling wrote.

“Current capacity in Sandy Bay and the CBD is sufficient to support the student experience we seek to provide through our statewide accommodation.”

The hotels will go on the market seeking expressions of interest on Thursday.

Originally published as University of Tasmania checks out of central Hobart hotels