4 August 2017
The Clean Energy Finance Corporation has announced its first major property investment in Adelaide, to drive the development of innovative new student accommodation. The project will set a new benchmark for energy efficiency design and demonstrate the benefits of market-leading building standards.
The CEFC has committed debt finance of $32 million to the 428-bed student accommodation project in Waymouth Street, Adelaide. Managed by specialist student accommodation provider Atira Student Living, the off-campus, purpose-built student apartment complex is a joint venture investment between Blue Sky Private Real Estate (BSPRE) and Goldman Sachs. BSPRE is developing the project, which is expected to open in February 2018.
CEFC CEO Ian Learmonth said: "We are very excited to be making our first property-related commitment in Adelaide. This project will lift the benchmark for building standards in student accommodation, representing an important step toward achieving net zero carbon buildings.
"The CEFC has a clear focus on investing in clean energy in industry sectors with the strongest potential for decarbonisation. We have already committed more than $600 million to the property sector in support of market-leading projects such as this one. With inefficient property contributing to almost a quarter of Australia's emissions, any improvements in this area will have much broader benefits."
CEFC Property Sector Lead Chris Wade said student accommodation developers have so far had a limited focus on energy efficiency, tending to build to minimum standards under the National Construction Code, which is typically the lowest cost option.
"We are looking to increase those standards by demonstrating the clear economic and environmental benefits of incorporating clean energy technology in the planning and construction phase. Through the CEFC's finance, the Waymouth Street development will achieve a minimum 25 per cent improvement on energy efficiency compared with business as usual. This improvement will deliver a significant reduction in the building's carbon intensity, as well as lower ongoing energy costs," Mr Wade said.
"We're demonstrating to property developers, owners and managers that constructing the next generation of energy efficient student accommodation can be rewarded with long-term operational savings and an improved amenity, which makes a strong business case for the additional upfront investment."
The student accommodation project in Adelaide's CBD is within walking distance of campuses for both the University of South Australia and the University of Adelaide.
Adelaide has a significant student population, including more than 65,000 full time higher education students, according to the 2016 Savills' market report into Australian student accommodation. The same report found there were only 5,371 beds provided by universities and commercial operators in purpose-built student accommodation, catering for less than 10 per cent of enrolled students and illustrating the significant undersupply of this type of accommodation in Adelaide.
BSPRE Investment Director Nick Singleton said that by investing in environmentally sustainable design initiatives, the Waymouth Street project was expected to help meet accommodation demand, while positioning itself as a leading accommodation provider for students.
"While liveability and sustainability are key considerations for today's students, we also expect to create benefits through reduced operating costs by integrating technologies that significantly lower base building energy usage," Mr Singleton said.
Initiatives incorporated into the Waymouth Street project include energy efficient heating, ventilation and air conditioning, energy efficient equipment, LED lighting, centralised gas water heating, water efficient taps and a 25kW rooftop solar photovoltaic system.
The CEFC's investment in the Waymouth Street student accommodation project is another example of its focus on delivering clean energy solutions in Australian cities, via its Sustainable Cities Investment Program.
The CEFC, with consultants Norman Disney & Young (NDY), recently produced a very useful handbook on Energy in Buildings - 50 Best Practice Initiatives, which identified student accommodation as an area that could unlock substantial and ongoing energy savings from increased energy efficiency.