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July 16, 2024
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Blackstone & Cedar Pacific/UniLodge
Blackstone & Cedar Pacific/ Unilodge
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Client | Lender’s Project Consultancy |
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Budget | $300Mill+ |
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Services | Building Upgrade |
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Sector | PBSA |
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Scope | - |
Service Provided
Building Upgrade
Project Details
293-303 La Trobe Street – 715
beds 17-23 Wills Street – 660 beds
beds 17-23 Wills Street – 660 beds
Overview & Approach
- 293-303 La Trobe Street & 17-23 Wills Street Melbourne are two separate Purpose Built Student Accommodation (PBSA) projects being undertaken by Cedar Pacific/UniLodge, one of Australia’s most prominent developers and operators of student accommodation.
- 293-303 La Trobe Street is a 45-level building comprising 715 beds for student accommodation. The building also hosts 180 bicycle parking bays, retail space, laundry, gymnasium, and other shared communal areas. Development Gross Floor Area (GFA) is 21,051sqm.
- 17-23 Wills Street is a 37-level building comprising 660 beds for student accommodation. The building also hosts 166 bicycle park bays, retail space, laundry, gymnasium, and other shared communal areas. Development Gross Floor Area (GFA) is 16,667sqm.
- Blackstone is providing project finance for Cedar Pacific, with SPP appointed by Blackstone as Lender’s Project Consultant. This unique service to financiers provides a ‘one stop’ commercial overlay to large development projects that incorporates pre and post-finance due diligence and construction monitoring services.
Pre-Finance Due Diligence
- SPP worked in partnership with Cedar Pacific by undertaking due diligence and a complete commercial review of the project on behalf of Blackstone. This included a review of project costs, as well as an assessment of potential risks and opportunities across time and quality. The information analysis was achieved through document review, stakeholder interviews and requests for information. SPP incorporated an examination of the following as part of its due diligence report for Blackstone:
- Project financial status, including cost reporting and cashflow;
- Development and construction program;
- Design documentation, including Greenstar assessments;
- Construction contract;
- Quality assurance, environmental and WHS documentation;
- Valuation reports (based on end value at completion); and
- Alternative use studies to verify the highest and best use of the site.
Through project knowledge attained during the pre-finance due diligence process, SPP was in a solid position to assist Blackstone and its legal team in negotiating project finance agreements, leading to financial close.
Post Financial Close & Construction Monitoring
- SPP continues to provide ongoing monthly monitoring and drawdown reporting for the project, representing Blackstone on all matters documented within the project finance agreements. Spectrum offers an objective lens to the project position by identifying any material changes to critical risks and mitigations being executed across the project budget, construction program and quality assurance measures.
- This phase involves a ‘hands-on’ approach, working closely with Cedar Pacific’s project team through open lines of communication for all facets of project health, including:
- Liaison with the consultant team (Project Manager, Quantity Surveyor) and head contractor;
- Regular site visitations, including progress claim walks; and
- Attendance at PCG meetings
In collaboration with Blackstone’s legal team, SPP also conducted a commercial review of key legal agreements associated with the project, including Agreements for Lease (AFL’s), ground leases, subleases, title documentation including strata plans and easements and other critical precedents.
Key Objectives and Constraints
- Ensuring the financier is made aware of key issues and risks associated with the projects with respect to time, cost and quality.
- Monitoring of construction activities through the impacts of COVID-19
- Attendance at PCG meetings and regular site inspections to monitor conditions and witness project progress.
- Coordination of project team, including project manager and quantity surveyor, to facilitate the monthly finance drawdown process.
- Preparation of a monthly report to advise the financier of the monthly drawdown amount along with commentary on all material project issues, progress, risks and associated mitigation measures.
Summary Results and Outcomes
- Technical Due Diligence Report prepared prior to finance agreement, highlighting current project status and providing insights into potential risks to time, cost and quality.
- Integrated project oversight and coordination of monthly drawdown process, culminating in a monthly drawdown report.
- Line of communication facilitated between financier and project delivery team. Complete utilisation of loan facility.
- Financial outcomes aligned with project objectives. Financier’s ‘one stop shop’ for all project information Project completed on time for student intake prior to the first university semester of 2023.