The Western Sydney University project involved innovative financing arrangements to maximise the value and commercial benefit to the University from securitising the future income stream from their existing portfolio of 1,237 beds spread over 5 separate campuses.
This transaction satisfied a unique set of objectives and generated a significant upfront payment to the University at Financial Close. Further, CLV structured a profit sharing arrangement with the University that closely aligned the interests of both parties to maximise the cash flows over the concession term whilst operating within key affordability metrics.
In 2008, CLV won the right to build, own, operate and transfer 343 beds for the Parramatta campus. As a testament to CLV’s relationship with the University and its performance as the operator, CLV was selected following an EoI process to own and operate and access the rental cash flows to 1,237 beds over the University’s other five campuses at Campbelltown, Penrith, Nirimba (Blacktown), Bankstown and Hawkesbury.
CLV worked closely and in partnership with the University, our tax partners and financiers to develop a unique commercial outcome that maximised the overall value of payments to the University. The project provided a number of challenges for CLV’s project team as proven historical occupancy over two-thirds of its portfolio had to be blended with new developments at the Bankstown and Penrith campuses. Further, the University was operating under a GST–free status meaning that the rents had to comply with affordability principles and set at 75% of market to be eligible for favourable GST outcome on the construction capex on existing and new buildings. CLV’s commercial capability, operational experience and focus on high quality student care were key elements in the University’s selection of CLV.
The project also includes a staged refurbishment program on targeted existing accommodation to bring the quality in line with the new beds on offer and to create optimal price points and value for the students.