Morrison gets full ownership of Aussie campus project

The Auckland-based firm is snapping up Balfour Beatty’s stake in the $185m University of Wollongong housing scheme shortly after one of its founding partners stepped down.

Morrison & Co has acquired the 50 percent it did not already own in the University of Wollongong Student Accommodation Project from the investment arm of UK developer Balfour Beatty.

The scheme includes a licence over the university’s existing accommodation portfolio of 1,811 beds and the delivery of a further 1,063 beds across two development stages. The New Zealand-headquartered fund manager is investing via an account managed for a single client, the name of which was not disclosed.

Morrison, acting for the $160 million Public Infrastructure Partners, acquired its initial 50 percent holding in the project in 2014, in what has been hailed as a landmark deal for universities willing to raise funds from novel sources.

The University of Wollongong granted the 39-year licence of its entire student accommodation portfolio to the Morrison-Balfour Beatty consortium in exchange for a substantial injection in its teaching and research endeavours, as well as funding for the newbuild project itself.

This helped raise the profile of student accommodation as a potential source of revenue for Australian universities. “Since the University of Wollongong deal, universities have realised they can get the private sector in to build and/or maintain the accommodation, while at the same time raising money off the back of the student revenue,” commented Ken Nguyen, a partner at Ashurst, in a note posted on the law firm’s website.

Morrison exercised its pre-emption right to become sole shareholder in the project. After decommissioning of some older stock, the firm will work with Australia-based Programmed Facility Management to provide hard facilities management services for the concession period.

The move follows a recent management shake-up at Morrison. Late last month, the firm promoted investment director Paul Newfield to the role of chief investment officer after Lib Petagna, one of its founding partners, stepped back from the running of day-to-day operations. Petagna remains a member of the board.