An AMP Capital infrastructure fund has won a 42-year concession to run a 527-bed post-graduate student accommodation facility in Melbourne, Australia.
The AMP Capital Diversified Infrastructure Trust (ADIT) did not disclose the value of the latest transaction, but IPE Real Assets understands that it is around A$150m (€93m), lifting its student housing portfolio to more than 6,300 beds valued at A$400m.
The accommodation, located at Melbourne Connect, a new campus being built by the University of Melbourne, on the fringes of the city’s central business district, is due for completion in 2021.
ADIT portfolio manager Brad Williams told IPE Real Assets the latest addition to its portfolio increased its exposure to a growing sector in Australia’s education industry and supported diversification in the ADIT portfolio.
“We try to balance our portfolio between assets that provide growth, yield and regulated cash flow to get good returns from our investment,” he said.
Williams added that, unlike other investors, AMP Capital looked at these investments as infrastructure that generated cash-flows from concessions.
As well as student housing, the ADIT portfolio owns airports, toll roads, and utilities.
In April, ADIT and a sister fund AMP Capital Core Infrastructure Fund purchased a 34-year concession in a A$700m deal with Australian National University (ANU) to manage its 4,200-beds student accommodation portfolio.
Williams told IPE Real Assets that ANU was planning to expand its student accommodation and that AMP Capital would be interested in securing the concession to the additional accommodation.
Asked about the risk of oversupply in the market, Williams said AMP Capital partnered with universities to protect its investment from downside should there be an oversupply.