PPP, Social Infrastructure

Kingston University Student PPP

August

2020

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Project Info
Client
Equitix, Engie
Location
UK
Value
GBP 100m +
Sub-Sectors
Sub-Services
project lead

Ramon Sequeira

Director
We provided financial advice to Equitix and ENGIE in reaching financial close on Kingston University’s £100m+ student accommodation DBFO PPP project.

The project involves the refurbishment of 1,216 rooms alongside the construction of 117 new rooms at the University’s Kingston Hill and Seething Wells sites in south west London. In addition, five listed buildings at Seething Wells will be renovated, providing dedicated events space and a café. The project will transform the student experience for residents, replacing older stock with revamped, modern, energy-efficient accommodation. The buildings will also have new extensions, incorporating upgraded kitchens and larger social spaces for students.

Equitix and ENGIE, together with Kingston University, formed a special purpose vehicle named Kingston Student Living (KSL), which will be responsible for all aspects of the redevelopment and operation of the accommodation. Equitix, a leading investor in the student accommodation sector, holds a 70% share in KSL, with ENGIE and Kingston University holding a 15% interest each. ENGIE will carry out the refurbishment and development works and provide facilities management services, with the University marketing and allocating the rooms in line with its own accommodation.

Taking advantage of the prevailing record-low interest rates, KSL privately placed circa £90 million in secured bonds with three institutional investors. The bonds are scheduled to mature in February 2055, with 50% being fixed-rate and 50% RPI-linked. The underlying project bonds have been rated ‘BBB-‘ by S&P, increasing to ‘AA’ with a ‘stable outlook’ by virtue of the credit enhancement provided by Assured Guaranty.

We acted as financial advisor to the consortium from the initial competitive bidding phase – where we supported in identifying the optimum financial structure and led the financial aspects of the bid documentation – through to working closely with KSL and its advisers in the preferred bidder phase to secure financing and achieve financial close.

Ramon Sequeira, Director at EvoInfra, said “We are delighted to have supported KSL in closing this transformative project in challenging market conditions. All parties needed to work even closer than before to understand and devise solutions to overcome the difficulties introduced by COVID-19. The successful financing of the project demonstrates the continued strength of the sector in testing times.”

Construction has commenced and is due to complete in the summer of 2022.

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