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Education | Infrastructure | Planning & Design

Risks that universities should consider when structuring a PBSA transaction

28 Oct 2016, by Informa Insights


In a bid to become more competitive and attract and retain those all-important international students, many universities are now accelerating the development of their on-campus accommodation.

And with the current attractiveness of the debt and equity market, there has never been a better time to monetize existing accommodation assets or gain assistance from the private sector to develop new assets.

Meanwhile, investors are drawn to the profitability of the growing student accommodation market, CPI linked cash flows and scarcity of high quality assets. All Australian capital cities are significantly under-supplied with purpose built student accommodation.

James Hawkins of Flagstaff Partners who is due to speak at Informa’s Purpose Built Student Accommodation conference next month in Sydney, has undertaken a number of top-shelf advisory projects with Australian universities.

james-hawkins James Hawkins, Executive Director, Flagstaff Partners is due to speak at the Purpose Built Student Accommodation conference in Sydney this November.

Most notably he has worked with Australian National University, who have the largest student accommodation portfolio in Australia.

“We are seeing a real trend in the university sector” he tells Informa, ahead of his presentation at the conference, “with many universities partnering with investors to develop new and monetize existing student accommodation; both of which is then returned to the university after a defined concession period”.

James lists two concerns for investors associated with this type of transaction. Firstly occupancy risk – the risk that beds may not be filled. And secondly, competing market supply.

“It is imperative that universities structure these transactions to address these key concerns” he adds.

Talking in depth about his advisory work with Australian National University’s latest student accommodation initiative, James will offer strategic advice to universities attending the conference.

Book your place now.


Featured image credit: Apartment Therapy


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