Hertfordshire Student Accommodation Financial CloseMay 29th 2013
The University of Hertfordshire and Uliving (the consortium comprising Bouygues Development and not-for- profit housing association Derwent Living) have reached, together with Meridiam Infrastructure and Legal & General, financial close on the £190 million, off balance sheet single asset, demand risk project for the University of Hertfordshire to deliver its new student accommodation scheme. Today’s release follows the announcement in July 2012 that the consortium had been appointed preferred bidder.
Located at the College Lane campus in Hatfield, the project is part of the University’s vision to enhance students’ lives by creating a fully inclusive living and learning campus environment.
Under the scheme, Uliving will be responsible for the design, build, finance and operation of new student accommodation totalling over 3,000 bedrooms, and the associated social spaces and infrastructure works.
Funding will be arranged through an index linked unwrapped private bond placement with a maturity of c. 41 years. This innovative project bond financing is the first of its kind to be implemented in Europe and gives Uliving access to particularly long term financing provided by institutional investors as an alternative to traditional shorter term banking solutions. Equity partners for the scheme are Meridiam Infrastructure Finance II (55%), Bouygues Development (13.3%), Centro Place Investments, a subsidiary of Derwent Living, (13.3%), University of Hertfordshire (13.3%) and Legal and General Assurance Society (5%).
Bouygues Development will manage the development and construction management of the project. Derwent Living, again as part of the Uliving consortium, will be responsible for the operation and facilities management elements of the contract for a total period of 50 years. The operation and facility management tasks will begin immediately to cover the existing student accommodation.
Construction, which involves the development of over 2500 new bedrooms before September 2016, will be undertaken by Bouygues UK under a contract worth ca. £117 million. Derwent Living’s provision of asset management and facilities management services for the new and existing units will be worth more than £200 million over the lifetime of the contract. Derwent Living will also refurbish the existing 500 bedrooms over the next three years
The scheme will be delivered in three phases with the first phase due to commence immediately and is scheduled to be completed in September 2014 in readiness for the start of the new 2014/2015 academic year.
Each subsequent phase will be completed in time for the start of the following academic year with the entire scheme being completed in September 2016. Construction works will run alongside the existing accommodation units, which will be transferred to Uliving immediately and be in full operation throughout.
In addition to the main construction and refurbishment works, the scheme includes new sports pitches, a campus gym, informal learning and social spaces and a new dedicated bus route.
The University of Hertfordshire’s Student Accommodation Scheme is set to be a market leader in sustainability representing an exciting first in its sector. The new buildings will will achieve BREEAM Outstanding certification for all three phases and Main Hub.
Through these innovative features, this project will therefore contribute to the UK transition towards a highly competitive and low carbon economy.
Architects for the scheme are Willmore Iles.
Commenting, Nicolas Guerin, Managing Director of Bouygues Development and Uliving said: “I would like to thank everyone involved in this fantastic achievement. This is the first time a deal such as this has been achieved in the UK. This success is attributed to the hard work and dedication of the whole team over many months. For Uliving, today reinforces our market position as a UK leading student accommodation provider and we are proud to be in partnership with the University of Hertfordshire in delivering this state-of-the-art scheme”.
Peter McCormack, Chief Executive at Derwent Living said: “This is a really exciting project and will see the accommodation lead the market in terms of sustainability and represents a first in the education sector. The new buildings will meet BREEAM Outstanding requirements under the 2011 regulations.
“Derwent Living’s role is to look after the operational and facilities management of this large multi-phase development. Our organisation has a proven track record of working on large student accommodation schemes throughout the UK and the University of Hertfordshire is one of the largest schemes we have worked on to date. I am delighted that once again through the use of innovative funding we will be able to deliver state of the art accommodation at such a prestigious university.”
Professor Quintin McKellar, Vice-Chancellor, the University of Hertfordshire says: “In our view, this is pioneering and commensurate with the values of the UK’s leading business-facing University. We attribute the success of this project to our partners Uliving and to our Estates team for providing us with a way to further invest in our students so that we can continue to enhance their lives on campus.”
Commenting Thierry Déau, CEO of Meridiam Infrastructure, said: “Together with its industrial and financial partners, Meridiam is proud of establishing this long term partnership with the University of Hertfordshire. This project will be a concrete example of intergenerational solidarity as promoted by Meridiam. Long term savings of future pensioners are mobilized today to finance a project key to a young student population that will in return contribute to the UK long term competitiveness. The innovative long term bond financing of this project is a first-of-its kind in Europe and paves the way for the development of project bonds all over Europe. Meridiam intends to continue to play a leading role in the coming years to foster this development.”
Paul Stanworth, Head of Group Treasury and Investment at Legal & General plc, confirmed that Legal & General is aiming to significantly increase its investment in UK infrastructure, adding that “the over £145m of debt and equity which the Legal & General Group has invested in this scheme will make an important contribution to the development of the University of Hertfordshire. We are proud to be participating in this project and look forward to its completion.”
Category: Development news
Tags: Bouygues Development, Bouygues UK construction, Construction, Derwent Living, Nicolas Guerin, Uliving, University of Hertfordshire