Overview:
- Australian National University (ANU) has signed a 30-year concession agreement with H.R.L Morrison and Co for nine student residences to house 3,760 students on campus.
- The project is the largest PBSA transaction by value that has been entered into in Australia, with an estimated value of A$3-4 billion.
- The concession arrangement also involves the private sector paying a substantial upfront payment of A$500 million to the University to purchase the right to receive student rents and other revenues derived from that student accommodation over a 30 year concession period.
- The contract includes a new 500-bed student residence, currently under construction, which has been procured by ANU and had to be taken into account in the project, as the new residence will form part of the project company's responsibilities over the next 30 years.
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The long-term arrangement ensures the University retains full ownership of the residences, notwithstanding that the project company takes the revenue risk on student rents without any direct occupation support from ANU. ANU will have continued responsibility for student accommodation operations. Facilities maintenance will be carried out by Spotless as a subcontractor to the project company and Spotless will also carry out a range of initial improvement works at the residences.
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The transaction will also serve as a precedent for Universities looking to realise value from their student accommodation portfolio and represents a new and valuable capital source for universities looking to raise funds outside the more traditional debt markets.
Adam Majeed - Regional editor
