The Australian National University has signed a $165 million deal to make over and expand its student accommodation facilities.
Infratil and Commonwealth Superannuation Corporation have been awarded a 30-year financial concession and lease arrangement on nine existing ANU residences, in exchange for the capital funds to upgrade facilities.
The deal encompasses the new SA5 building under construction, Burton & Garran Hall, Graduate House, Toad Hall, Ursula Hall, Davey Lodge, Lena Karmel Lodge, Kinloch Lodge and Warrumbul Lodge.
The investors will receive a guaranteed return on investments based on student numbers while the ANU retains ownership of the residences and will continue its management of, and responsibility for, student accommodation services.
Bruce Hall and Fenner Hall have been excluded from the deal with Bruce Hall likely to be redeveloped under a $100 million donation from Graham and Louise Tuckwell, which will see two new halls of residence built to house 800 students.
The contract, details of which were provided to the Australian Stock Exchange on Tuesday night, includes an upfront payment to the ANU which will be used to repay university debt, help fund the proposed redevelopment of Union Court and improve student services.
ANU vice-chancellor Professor Brian Schmidt said the agreement would give the university the opportunity to upgrade and improve its student accommodation, and would help ANU meet the strong demand for student accommodation on campus.
"Improving and providing more student accommodation on campus is one of the university's highest priorities," Professor Schmidt said.
In a statement to the ASX, Infratil said it had invested $82.5 million, which was half the equity investment. The deal encompassed around 3760 beds.
Infratil chief executive Marko Bogoievski said the long-term concession included responsibility for the provision of "hard" facilities management services such as building maintenance and lifecycle replacement. The investors had sub-contracted the provision of these services to Spotless for the term of the concession. The ANU retained responsibility for the delivery of "soft" facilities maintenance services, such as marketing and managing applications for the accommodation, processing rental agreements, cleaning internal areas of the residences and providing day-to-day pastoral care to residents.
"The ANU portfolio is the standout portfolio in the on-campus purpose-built student accommodation (PBSA) sector in Australia in terms of both scale and quality. PBSA is an emerging asset class supported by strong domestic and international demand growth for quality tertiary education. The concession agreement provides the consortium with a stable, long-term inflation-linked cash flow and rights and protections regarding the development of additional on campus PBSA residences," Mr Bogoievski
The ANU investment will be managed by investment management firm H.R.L Morrison & Co on behalf of Infratil and Commonwealth Superannuation Corporation.
The ANU said that in line with current practice, student rents will not exceed 75 per cent of market rates, and rental tariffs will be calculated based on a pre-determined formula referenced to changes in the consumer price index.
Professor Schmidt said the announcement – following from the Tuckwell investment – underlined his vision to expand the campus residential experience to as many students as possible.
"These two important announcements underscore the university's commitment to making sure students who live on campus have access to the best-quality accommodation and can contribute to the life and culture of the university," he said.