Private school's $25m, 20-year property spending spree

One of Melbourne's most prestigious private schools has continued its aggressive expansion by buying a neighbouring house for almost $1 million above reserve.

The auction result means Scotch College ??? where high school tuition fees start at $26,000 ??? now owns all but 11 of 27 houses in Hawthorn's Hambledon Road.

The exclusive boys school, which sits on 27 hectares, has spent about $25 million on property in adjacent Hambledon and Fordholm roads alone.

Earlier this month, the elite private college, where 1880 boys are enrolled, paid almost $1 million over the auction reserve price for a three-bedroom brick home at 20 Hambledon Road.

Listing agent Jason Brinkworth from Marshall White would not comment on the sale or the identity of the successful bidder.

But industry sources say the private school was determined to scoop up the property, bought under the hammer at public auction for just shy of $3.2 million.

The house, owned by the same family for 66 years, had a price guide of between $2.2 million and $2.3 million.

The expansion of Scotch College's property holdings comes as no surprise to those familiar with the school: it has been buying neighbouring houses for decades.

Domain Group records show the private school bought two properties in Hambledon Road in 1997 for $567,500 and $460,000, respectively.

The buying spree continued after the turn of the century as price tags in the area approached seven figures.

It bought another house in Hambledon Road for $850,000 in 2001, before buying the one next door for $1.4 million two years later.

In 2007, the college splashed more than $5 million on three other properties in the street.

Prior to last month's auction, the school's most recent purchase was a $2 million house in 2015.

It also owns all of the properties along Morrison Street, which has formed part of the school campus for many years.

Houses in Morrison Street are used for bagpipe lessons, media studies, administration and archiving. But the school would not comment on what purpose their 17 other properties served.

In a statement, the school said it began buying neighbouring property after losing chunks of the school grounds to the state government for Citylink.

"On three occasions since the 1960s, the government has compulsorily acquired land from the school to construct the [south-eastern] freeway and enable its subsequent widening into the Citylink tollway," a spokesperson said.

"Bound otherwise by the tollway, Yarra River and Glenferrie Road, the school has a long term strategy to re-establish grounds lost to the tollway by acquiring land to the north."

In 2013, the then-Napthine government paid Scotch College $5.4 million for a thin strip of land after the school knocked back earlier offers of $1 million.

The school also received $4.1 million in compensation for land acquired for the expansion of the south-eastern freeway ??? now the Monash Freeway ??? in the mid 1990s.

It is rare for properties within a stone's throw of a prestigious school to be listed on the market, and they typically fetch a premium price.

Domain Group chief economist Andrew Wilson said Scotch Hill, the area near the school, was regarded as part of the ultra prestige market.

He described the school's purchases as "very timely and financially positive investments".

The story Private school's $25m, 20-year property spending spree first appeared on The Sydney Morning Herald.