UWI dorm project falls behind ... But deputy principal affirms all units will be built
The University of the West Indies (UWI) is looking carefully at the timing of construction of the final set of rooms under the three-phase plan to increase student accommodation on the Mona campus, according to its concession partner.
But the university itself is affirming that the concession agreement will be executed in full, albeit that construction is behind schedule.
John Lee, chairman of 138 Student Living Jamaica Limited, said his firm may not keep to the initial timetable to build the final 600 rooms called for under the concession agreement with UWI.
The three-phase housing project should have wrapped up construction by July 2017, but Student Living is still in the process of planning the construction of another 200 rooms for Irvine Hall and completing other works under phase two of the concession agreement.
"For Irvine Hall and phases one and two, there is robust demand. We are happy with that progress," said Lee. But "adding another 600 rooms would have to be given careful thought", he said.
On Thursday, UWI Deputy Principal Professor Ishenkumba Kahwa told Gleaner Business that the third phase will be executed as initially planned.
"Student housing demand is huge, especially for more modern accommodation. There is demand for it. Irvine Hall, which was completed last year, is completely full, and there was a long waiting list," said Kahwa.
"We are comfortable with the demand for rooms, especially for modern rooms. Many rooms that we have like Taylor Hall are fairly old and have outlived their usefulness. Whenever there is a chance for us to modernise, we really would want to do so," the professor said.
To date, Student Living has completed 1,008 of the 1,572 rooms it is contracted to deliver under the concession agreement, says Lee.
Full build-out, as originally planned, had been predicated on the growth of the student body, Lee said. Because the annual $100-million concession fee payable by the firm to UWI is prorated according to the number of rooms in operation, Student Living, for now, does not have to pay over the full cost, the chairman said. That changes once all the rooms are constructed and commissioned.
The concession agreement calls for Student Living to build, own and operate the accommodations for three decades. Lee said his firm has been marketing the rooms on both local and international platforms to increase occupation for holiday periods, particularly in the summer months of June and July.
Currently, he said, there were 10 overseas groups on campus, including a group for Canada involved in warm-weather training, and another, a religious group, on its way from India.
Kahwa said student numbers are up this year.
"And we are going to make a huge effort to bring in international students. There are going to be some announcements later in the year that will really show that we will need more accommodation," the deputy principal said.
"The outlook, if you ask me, the outlook is that the project will be competed. I don't know when, but I think it will be completed," he asserted.
Meantime, Student Living has switched its financing partner from CIBC FirstCaribbean Jamaica to Sagicor Investments Jamaica Limited, which, in December 2017, structured $400 million in debt financing for the completion of phase two of the UWI dorms. The private placement is priced at WATBY plus 3.50 per cent. Sagicor Investments is a member of Sagicor Group Jamaica, which itself controls large shareholdings in Student Living.
"Sagicor now owns 40.4 per cent of Student Living. There are lots of synergies to be got," Lee commented.
The student housing firm now owes $4.4 billion in long-term loans, which equates to half its asset base of $8 billion at year ending September 2017.
Student Living made a profit of $20 million for the year, before tax, compared to a loss of $24 million in the 2016 period. The company's bottom line benefited from $50 million of tax credits in each of those years, boosting its net profit to $70 million this year and $26 million in 2016.
Lee said there were more tax credits to be applied, going forward, based on losses in the construction phase.
Student Living's annual revenue doubled from $255 million to $573 million. The company is looking around Kingston - where discussions are ongoing with the University of Technology, Jamaica - as well as overseas for new projects to boost revenue, Lee said.