Sale of ANU Canberra takes unexpected twist  

07 February 2019 - 12:00 am UTC

Student accommodation at ANU Canberra could now be sold in its entirety after one of the shareholders opted not to buy out seller ASX-listed Infratil, said two sources familiar with the matter.

In a new development, Australia’s Commonwealth Super has chosen not to take up its pre-emptive rights on the 50% Infratil shareholding and could even sell out themselves depending on final bid prices, the sources said. Bidders have been informed that the full student accommodation portfolio could now be up for grabs. 
Neither Infratil nor Commonwealth Super would comment on the development. 
A number of large infra funds are playing hard for full ownership of the 4000-plus bed student accommodation portfolio at ANU Canberra, including QIC and AMP Capital. Inframation understands both have moved through to the final round, although it is not clear if there is another potential buyer in the race. 
Bidders have been told the sale will wrap up by the end of March. Indicative bids were handed in to Infratil advisors Ironstone Capital just before the Christmas break.
AMP Capital is thought to be in the hot seat to bag the asset, two sources familiar indicated. The fund manager recently nabbed the rights to two student accommodation halls at the University of Melbourne’s Parkville Campus for 40 years via its Diversified Infrastructure Trust vehicle, according to InfraDeals.
Incidentally, AMP Capital finished second on the original sale of the ANU 30-year concession back in 2016, bidding higher than the winner Infratil which is now selling up, said the first source. Still, it’s likely to come down to the highest bidder, he added.
“AMP Capital lost last time so are keen to win,” the second source familiar said.
Infratil’s 50% half share was held at a book value of NZD 107m (USD 72.2m) as of 30 September. Morrison’s listed infrastructure owner Infratil and Commonwealth Super paid AUD 82.5m (USD 58.3m) for the PPP concession in 2016, according to InfraDeals
The portfolio sale, located at one of Australia’s most prestigious universities would be a first in the sector for the QIC Global Infrastructure Fund, which has plenty of firepower, as reported. RBC Capital Markets is advising QIC on the deal, Inframation can confirm. 
QIC first made a play for the 30-year PPP concession in 2016, but did not pursue it beyond the first round because it was chasing other large deals at the time. 
The global fund manager bagged a huge 50-year concession on Boston’s Northeastern University car parks last month. The university sector is very attractive to the Brisbane headquartered fund and partnering with these type of institutions, the first source said. 
“QIC will look at anything and has a broad mandate. They’re good investors who don’t lose,” a market source indicated.
Obvious attractions to the asset is the portfolio has a good yield, is better than a state based PPP with no design and construction risk. Due diligence is also far more straightforward than say, a toll road.
The robust demand for housing at ANU from both local and international students is also alluring to the funds. International education is a booming industry and is the country’s third largest export, injecting almost AUD 32bn into the economy last financial year. 
Student accomodation stalwart Campus Living Villages was also said to be looking at the deal, Inframation understands, but it is not clear if it made it to the final round. CLV was not available for comment at the time of writing. InfraRed Capital Partners and DIF were also said to be lining up, as reported.
The trio were all shortlisted in 2016, but were pipped to the post by the Infratil/Commonwealth Super bid. 
Infratil’s parent, HRL Morrison & Co, manages the portfolio on behalf of the listed infrastructure owner Infratil and the Australian government-owned Commonwealth Super.
Elsewhere in the university accommodation sector, Western Australia’s Curtin University deal is close to signing. As reported, InfraRed is the preferred bidder on the circa AUD 200-300m deal. Campus Living Villages (CLV) was the other bidder in the frame.