Private investors will build new accommodation for more than 1000 students on University of Wollongong land as part of a lease agreement aimed at freeing up millions of dollars for the university.
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UOW will license its entire student accommodation portfolio to an international consortium, Living + Learning Partners, for 39 years.
In return, the consortium will foot the undisclosed bill for new high-rise residences on Northfields Avenue and within the Kooloobong Village student accommodation precinct.
UOW's chief administrative officer Melva Crouch said the university would retain control over the day-to-day operation of all the residences, and would have final say on any rent increases proposed by the consortium, whose lead partner is Balfour Beatty Investments.
"We will be looking to keep [rent] manageable for students," Ms Crouch said.
"We don't want to price ourselves out of the accommodation market."
The agreement includes detailed requirements for the standard to which the new players must maintain the buildings.
Older residences will be reviewed, with the aged Kooloobong townhouses and "trench town" single-storey units at Campus East certain to be demolished.
Ms Crouch said the cost of land had snuffed out earlier suggestions the university would build student accommodation in Wollongong's central business district.
"We have the land here [on campus], the student experience is easier to build here and a lot of our international students actually prefer to live on campus," she said.
"A lot of parents of our domestic students prefer the security and the proximity of living on campus, and of course we want to minimise the transport and traffic problems. If students are living on campus, that reduces the load on the transport system."
Balfour Beatty Investments is a global infrastructure investment company that mostly operates in the United Kingdom and United States, where it has built several university residences.
Balfour Beatty Investments managing director Rob Drake said Australian universities were increasingly likely to seek out public-private partnerships as a way of creating "financial windfalls" in the face of diminishing government support.
"We are aware a number of the other universities have been watching very closely this transaction," he said.
"The way deregulation is going, the lack of money coming from ... federal government means that universities will have to look at transactions like this to effectively monetise their portfolios.
"It's a very efficient way for them to access the private sector expertise in student accommodation."
The Wollongong project, with consortium partner Morrison and Co, is Balfour Beatty's first Australian university project.
The successful tender drew on Balfour Beatty's experience on past international infrastructure projects, particularly in Florida.
"That's really where the latest designs on university accommodation comes out of, and that's what we've brought to this project," Mr Drake said.
The agreement comes after an independent review showed UOW would need at least another 1100 beds by 2020.
The university currently owns and operates nine accommodation facilities, which house about 1900 students.
With demolitions factored in, the new agreement is expected to bring the total number of student beds at UOW to 2500.
Construction on the project's first stage, a 240-bed development for post-graduate students on Northfields Avenue, is expected to start in July 2015.
The second stage - an 800-bed high-rise at Kooloobong Village - is expected to conclude in 2018.
According to both parties, the accommodation portfolio will be returned to UOW, without charge, after 39 years.