The purge of residents from Australian National University's iconic Fenner Hall could open up a prime development opportunity along the Northbourne Avenue light rail corridor, Canberra real estate experts say.
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But the university says it has no plans to sell off the ageing hall, despite its prize location.
Students are expected to be relocated from the towers in Braddon into a new residence at its Acton campus in 2018, the same year that stage one of the light rail project is expected to be completed.
Paul Powderly, chief executive Colliers International, said the increasing value of the location presented an excellent opportunity for the university to divest the dilapidated student accommodation and reinvest in more rooms closer to campus.
He said the move would make the university even more attractive in the global tertiary education market.
"The site is ideally located for ANU to look at what would be a saleable site and attractive to developers, in line with the ANU's plan to update its existing student accommodation as soon as possible," Mr Powderly said.
"The building is coming to the end of its economic life and the ANU should be looking at these options."
The university's executive director of administration and planning, Chris Grange, told Fairfax Media earlier this week Fenner Hall's maintenance costs were too high to make it a viable asset, with at least $12 million of relatively priority works scheduled over the next two years.
Fenner Hall residents' new home, the SA5 building, is under construction next to Ursula Hall on Daley Road, on the university's Acton campus.
The new building is one of nine residences the university recently opened to private investment, in a move expected to attract hundreds of millions of dollars.
The university acknowledged on its website it "made sense" for a new campus to be constructed on campus given the ANU holds the lease for that land "in perpetuity".
Fenner Hall is the only university residence not on the university's campus and relies on a short-term lease from the Commonwealth Government, which owns the land.
The half-century old building is not heritage-listed but Real Estate Institute ACT chief executive Ron Bell said its long history and federal ownership could mean a number of approvals are required to redevelop the site.
But he added any "difficulty" in gaining the right approvals would be worth it, as the site is "grossly" underused.
"The footprint of the building for Fenner Hall doesn't occupy much of the land in terms of what could be allowed to be built on. You would expect that any developer who if it gained the right sort of approvals, would build a much larger complex," he said.
Mr Bell said the lease could be sold with the building and would fit neatly into the Northbourne plan by both the ACT Government and the National Capital Authority.
"It's going to be a lengthy process I would think but it's worthwhile undertaking because the site is grossly under-utilised and it does fit the plan the government wants to have for building a proper boulevard for Northbourne Avenue being the gateway into the city," Mr Bell said.
Mr Grange said that meant the ANU had no long-term certainty over the lease and could not sell the site. Any decision on its future would need to involve territory and federal governments.
He said any major spending on new accommodation would be much cheaper on campus, where the university had secure, long-term rights to the land and would not have to factor in land costs for any development.
Chief Minister Andrew Barr said on Tuesday the ACT Government had not yet had any discussions with the university about the site.
"Certainly anyone, including homeowners and businesses, with property along the light rail corridor will see an increase in the value of their property," Mr Barr said.
Just 400 metres down the road, Insurance Australia Group's 6270 square metre site on Northbourne Avenue is expected to hit the market in early April with a price tag of more than $20 million.
Mr Grange said the timing of the proposal was driven by the university's need to upgrade its existing student accommodation and had nothing to do with the ACT's light rail project.
