138 Student Living hunts new concession agreement
138 Student Living Jamaica Limited, which is months away from delivery of the first set of student flats at the University of the West Indies (UWI), indicated this week that it has another concession agreement in the works.
The current concession with UWI, Mona, calls for the company to finance, build and operate student flats while earning a 15 per cent real rate of return over a period of 30 years, with an option to extend the term to 65 years.
Ownership will revert to the university after an agreed period.
In the first quarterly earnings report filed by the start-up company this week, Chairman John Lee said that directors continue to look for new concession agreements to implement "which will enhance shareholders value," adding that they "expect to be able to make announcements on this matter in the near future."
Lee told the Financial Gleaner on Thursday that he would offer no additional details on the prospective deal ahead of a planned market filing to the Jamaica Stock Exchange, potentially by this month end.
Student Living's December quarter filing disclosed assets of $1.15 billion, of which $543 million was classified as construction work in progress, $119 million as advances to contractors; and $483 million were cash holdings. No income statement was included in the filing, but the report otherwise itemised expenses related to the IPO as $76.98 million; and said it transferred shares valued at $435.57 million in lieu of payment of professional services.
The real estate investment company will finance, build and operate 1,584 student residence units - spanning eleven new high-rise blocks - at the Mona campus in Kingston, in partnership with UWI.
Phase one of the construction is being financed by a joint $1.35- billion loan from Jamaica Mortgage Bank (JMB) and National Commercial Bank Jamaica (NCB), and from Student Living's $500 million IPO proceeds. Some $266m of the loan had been disbursed by the end of December.
The company disclosed that under the loan agreement, it was required to establish cash reserves of $377 million, and that those funds have been placed jointly with JMB and NCB for tenures ranging from 60 to 180 days.
Student Living will deliver 576 student flats by August, at the same that time that phase two construction is expected to begin.
"... We have commenced advertising for senior management to join the company during the second quarter of this year, as well as selecting furnishing and establishing a letter of credit for the delivery of the furnishing for the 576 rooms," Lee said in a statement appended to the first- quarter results.
The second phase will also deliver 576 rooms by August 2016.
Lee had previously said new sources of financing would unlock when the first 576 student flats are completed.