AMP to buy Melbourne schools PPP

The Sydney-based fund manager has agreed to buy out the entire project from the Royal Bank of Scotland, reportedly for A$255m.

AMP Capital, the Sydney-based fund manager focused on real assets, has inked a deal to acquire the Partnerships Victoria in Schools Project from the Royal Bank of Scotland from its Community Infrastructure Fund (CIF), according to an AMP statement.

The project, which was set up in 2008 as a public-private partnership (PPP) between the Australian government and the Royal Bank of Scotland, involves the operation and maintenance of 11 school facilities in the Greater Melbourne area for the remaining 23-year term. The size of AMP’s purchase was undisclosed, but previous media reports have placed it at around A$255 million (€171 million; $233 million).

The deal is subject to regulatory approval, but it would be the third PPP deal the open-ended unlisted fund has sealed in 18 months. In August, AMP bought a near-50 percent stake in the A$250 million South East Queensland Schools PPP from Commonwealth Bank of Australia; and in May of last year, AMP purchased the South Australian Schools PPP project. Altogether, CIF will now have an interest in 35 schools across Australia, with a capacity of more than 27,000 students.

“Social infrastructure investments, such as this one, aim to give investors a stable, high-yielding income stream with the added benefit of having a positive impact on the local community,” AMP Capital social infrastructure investment director Julie-Anne Mizzi said in the statement. “We’re finding there continues to be a lot of interest in this space.”

CIF is currently invested in nine social infrastructure assets in Australia and New Zealand worth approximately $1.2 billion (combining equity and debt). Aside from education, other sectors the fund is invested in include the health, justice and water sectors. Since its 2006 inception, CIF has achieved a 9.43 percent IRR, according to the AMP website.