LONDON--(BUSINESS WIRE)--University Partnerships Programme (UPP) has successfully reached financial close on its £155 million deal with University of Hull which, when complete, will see it operate 1,750 rooms on the campus.
The investment will include £127.6 million of index linked bond financing with a tenor of 40 years from Allianz Global Investors and £27.4 million of subordinated debt and equity provided by UPP Group, its Shareholders and the University. The deal boosts UPP’s University partners to 15 and its portfolio under management or in construction to more than 32,000 student bedrooms.
The development responds to demand from students for high quality on-campus accommodation and facilities. It will feature a range of 1,462 new single rooms and one bedroom apartments. They will comprise nine blocks, within the scale and context of the campus and neighbouring buildings. Alongside the accommodation, an urban green and avenue will offer a range of facilities including a café, convenience store, laundry facilities and formal and informal outdoor areas. UPP will also take over the operation of the existing 288 rooms at the University’s Taylor Court.
The project is one of several significant investments at the University as part of its commitment to offering the best student experience possible. The transaction represents the third large scale investment from Allianz Global Investors into the Higher Education sector to date and takes the investment made by Allianz Global Investors and UPP Group to more than £300m, following similar joint investments in on-campus student infrastructure at the University of Exeter and Nottingham Trent University.
The 51-year partnership demonstrates the appetite of the financial community for long-term investment opportunities in the Higher Education sector. It is a further vote of confidence in Hull and the Humber on the back of ABP’s £50m investment in its Humber ports last month and the opening of a £310m wind turbine blade factory in Hull by Siemens last December.
The construction value of the project is more than £97 million. Top Tier contractor, Vinci, has been appointed as UPP’s construction partner for the project. Construction of the project starts on site in May 2017, with 478 new rooms available for the 2018 student intake and the remaining 984 available in September 2019.
Sean O’Shea, Group Chief Executive Officer of UPP said: “We are delighted to have supported the University of Hull’s plans to develop the multi-million-pound West Campus Residences Project. Our partnership will enable more students to live on campus at the heart of this fantastic institution. The scheme will facilitate the University’s ambitious plans and have a positive impact on the wider community.
“By investing further in exceptional infrastructure that enhances the distinctive features of the University’s campus and promotes sustainable living, the University will build on its market-leading position of delivering the very best student experience. To date this year, UPP has secured £155 million for the University of Hull, while it also reached financial close on a £104.7 million deal to enhance and increase accommodation at the University of London and its institutions.”
Glenn Burgess, Acting Vice-Chancellor at the University of Hull, said: “We are delighted to attract this investment to the region and move forward with this project. The West Campus Residences Project will contribute to the University’s commitment to offering the best student experience and help continue to attract high-calibre students and staff, who bring an exciting range of talent and cultures to the city and enhance the local area. We’re proud to be investing so significantly in making Hull a highly desirable place to live, work, study, visit and invest.”
Adrian Jones, Director of Infrastructure Debt at Allianz Global Investors, said: “That this transaction is our third investment on behalf of our clients into UK higher education in three years, reflects just how much the UK infrastructure debt market has matured. We continue to see strong demand from our clients to invest in infrastructure assets that as well as offering them the long-term, stable cash flows they need also support regional economic competitiveness, providing an attractive investment opportunity as well as supporting our quality of life”.
The scheme will enhance and expand high quality on-campus accommodation at the University, following the opening of the £30-million Courtyard residences last December. The scheme will increase the total number of rooms available on-campus to 2,300, including Taylor Court.
The deal forms part of the University’s on-going strategy and builds on the University’s £200 million investment programme, as part of its commitment to provide an outstanding experience for its students, including new and refurbished buildings, IT infrastructure and student services.
Notes to editors
About University Partnerships Programme
University Partnerships Programme (UPP) is the leading provider of on campus student accommodation infrastructure and support services in the UK. We have around 32,000 rooms under management or in construction through long term partnerships with 15 leading UK universities. With over 800 employees, we work to deliver the very best student experiences, together with great universities.
We offer bespoke partnerships of typically 40 to 50 years which enable universities to make the most effective use of their assets, free up resources and improve services available to students. We design and develop high quality, affordable student accommodation on campus. Our innovative approach means our interests are aligned with those of each university partner.
Founded in 1998, we have since invested in excess of £2 billion in universities across the UK. We have established a long term growth strategy to ensure we remain well positioned to meet the growing demand for investment within the UK’s higher education sector, whilst at the same time helping our partners achieve their long term ambitions. In 2013, we outlined a five-year growth plan in which we aim to invest a further £1 billion in delivering the very best student experiences, as well as expand our portfolio to more than 40,000 rooms.
In 2013, UPP made its debut £382.1 million public bond issuance. With a multicurrency programme size of £5 billion, the issuance was the first of its kind within the sector and illustrates our ongoing ambition to bring long term institutional investment to higher education in the UK. In 2014, UPP launched a further tranche of £149.7 million index linked senior secured notes under its investment grade programme.
* All figures as at 31 August 2016.
About the development
The location will provide the perfect base for students to attend lectures and enjoy everything the University has on offer on campus, including the newly-refurbished Brynmor Jones Library, a cinema and world-class concert venue. Within walking distance, the University is also investing in new sports facilities, including a new floodlit outdoor pitch, gym, fitness studios and sports hall.
The development is planned for a 6.5acre site, which incorporates the existing Hertford car park which has 200 spaces. Plans are being developed to compensate fully for the loss of these parking places by adding a first floor to the ground-level Wilberforce car park on the campus.
The project is one of several significant investments being undertaken at the University, including The Courtyard, a £30 million development of accommodation for 562 students on the North side of the campus, which is almost complete.
Other major projects include:
- The £28 million Brynmor Jones Library redevelopment, which is nearing completion
- A £9.5 million redevelopment of Middleton Hall to create a world-class concert hall and cinema, opening October 2016
- A £28 million Health Campus currently under construction
- Around £15 million being invested in sports facilities
- A £7 million refurbishment of dining and conferencing facilities on campus
About AllianzGlobal Investors
Allianz Global Investors is a diversified active investment manager with a strong parent company and a culture of risk management. With 25 offices worldwide, we provide global investment and research capabilities with consultative local delivery. We have more than EUR 490 billion in AUM for individuals, families and institutions worldwide and employ over 500 investment professionals.
At Allianz Global Investors, we follow a two-word philosophy: Understand. Act. It describes how we look at the world and how we behave. We aim to stand out as the investment partner our clients trust by listening closely to understand their challenges, then acting decisively to provide them with solutions that meet their needs.
* Data as of 31 March 2017