AMP Capital has agreed to acquire student accommodation concession for Melbourne Connect.

AMP Capital has agreed to acquire the student accommodation concession for Melbourne Connect, a new campus being built by the University of Melbourne to bring together high-calibre research, industry, government and higher-degree students in a purpose-built precinct. The acquisition has been made on behalf of investors in the AMP Capital Diversified Infrastructure Trust (ADIT).

The 42-year concession includes responsibility for facilities management of the 527 bed post-graduate student accommodation facility in Carlton, which will open in 2021. This is in addition to AMP Capital’s existing investment to operate two facilities comprising 954 beds at the University of Melbourne’s Parkville campus.

ADIT Portfolio Manager Brad Williams commented: “Adding another quality student accommodation concession to our portfolio is a great outcome for our investors. It increases our exposure to a growing sector in Australia’s education industry and supports diversification in the ADIT portfolio.

“We now manage a portfolio of more than 6,300 student beds, including the Australian National University student accommodation concession announced earlier this year, and the 650-bed Sydney University Village facility, which is an investment we’ve held for more than 15 years.

“Melbourne Connect will be a world-class innovation precinct that will connect industry, government and leading academics and researchers. This post-graduate facility will complement our existing undergraduate-focussed facilities and provide investors with a CPI-linked revenue stream that is backed by strong demand for on-campus student accommodation from interstate and international students. Student numbers at the University of Melbourne continue to grow due to its reputation as Australia’s highest-ranking university,” he said.

In addition to student accommodation, the Melbourne Connect precinct will also feature 35,000 square metres of A-Grade office space for the Melbourne School of Engineering, co-working and commercial tenants, retail shops and a shared meeting and events space.

The University of Melbourne is Australia’s number one ranked university and among the leading universities in the world in the Academic Ranking of World Universities and Times Higher Education Global Rankings.

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The transaction is valued at over $700 million and includes a 34-year concession over 4,184 beds across ten existing residences on the Australian National University (ANU) campus in Canberra. The concession was originally established in 2016 and includes existing long-term outsourced facilities management arrangements while the ANU retains responsibility for operations.

ADIT Portfolio Manager and Investment Director Brad Williams commented: “AMP Capital has been successfully invested in university student accommodation partnerships for over 15 years. The ANU portfolio represents an exciting opportunity to grow our student accommodation platform to over 5,000 beds, adding to our recent University of Melbourne transaction in late 2018 and our partnership with the University of Sydney which began in 2003.

“The student accommodation sector is one of our core strengths and we are delighted to be able to continue to deliver value in this sector for our clients. Our large-scale portfolio of beds now provides our investors with access to long-term inflation-linked contracts with Australia’s top 3 ranked universities,” Mr Williams said.

AMP Capital Diversified Infrastructure Trust (ADIT)

Established in 1995, ADIT is one of the longest-running infrastructure funds in the world and invests in a diversified portfolio of core infrastructure assets in Australia and New Zealand. The fund, which currently has A$1.4 billion in assets under management, primarily targets mature unlisted infrastructure assets with diversified exposure to transport, energy and utilities and social infrastructure such as education facilities.

AMP Capital Core Infrastructure Fund (CIF)

Established in 2007, CIF provides investors access to high-quality unlisted infrastructure assets usually only available to large institutional investors. The fund takes an integrated approach to building a strategically blended global portfolio of unlisted infrastructure assets and listed infrastructure securities, offering investors a total return of income and capital growth.

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