The document discusses emerging risks and opportunities in the school infrastructure sector in Australia. It notes that the population is growing and becoming more urbanized, increasing the need for more school places. There is significant investor interest and capital available for social infrastructure like schools, but the current project pipeline is not meeting demand. Key risks discussed include keeping up with demographic changes, lack of past planning, flexibility in school design, and historical underinvestment in maintenance. Enablers of improved school infrastructure include better planning, stakeholder engagement, having a clear long-term vision and pipeline of projects, and streamlined procurement processes.

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Allens is an independent partnership operating in alliance with Linklaters LLP.
School Infrastructure Summit 2018:
Delivering Essential School Infrastructure
David Donnelly
Partner, Head of Infrastructure – Allens

2. 2
Allens is an independent partnership operating in alliance with Linklaters LLP.
Context

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• Growing Population:
 11.8m in 30 years – equivalent to adding a city the
size of Canberra every year .
 Canberra has 150 schools; 5 hospitals; and 2
prisons
• Urbanising Population:
 The ‘vertical population’ – increasing density in areas
without ‘easy’ school sites
 Need for integrated planning
• Demographics (2017 ABS Statistics):
 Total student enrolments were up 1.3% (50,999) and
the government schools share was up 1.2% (65.6% )
on the previous year's figure.
 30 New Schools (up 0.3%) –majority independent.
 Student retention rate to year 12 up 10.2% over the
previous decade.
Demographics

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• Infrastructure Investment Report 2018:
 Survey of investors who currently own or manage
infrastructure investments around the world totalling
more than AUD$380 billion.
 ‘Social infrastructure made the biggest jump with
76 per cent of investors interested in social
infrastructure assets, up from 42 per cent in
2017.’
 Observations:
o No shortage of capital interested in the asset class
o The current pipeline of projects is not meeting the
increase in demand for student places or the
demand for investable projects
o Interest in ‘khaki projects’ – mix of greenfield
development and brownfield service offering.
Investor Sentiment

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Australian Curriculum & School Assets
• Australian Curriculum
 Annual Reporting (with change
balanced against stability)
 Pressure through NAPLAN results?
 Impact on Pedagogy and design?
• School Assets
 Fit for Purpose – over the longer term
 Matching schools with demand
o Vertical schools
o Reservations and planning
 Community Assets? Additional Uses &
Stakeholders
 Size of opportunity – currently 9,444
schools across Australia (and growing)

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Allens is an independent partnership operating in alliance with Linklaters LLP.
‘Emerging risks’
Allens is an independent partnership operating in alliance with Linklaters LLP.

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‘Emerging Risks’
• Demographics
 More students, particularly in urban settings. (NSW predicting
21% growth to 2031, 80% of which will be in Sydney)
 Students remaining in school for longer
• Needs / Expectations
• Changing teaching and community expectations
• Technology
 Maintaining (improving) educational outcomes
 Addressing societal and community challenges
• School Infrastructure
 Increasing urbanisation – will drive additional community uses
 Access to land / sites – particularly in areas of densification
 Large (and growing) existing stock - maintenance challenge

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‘Emerging Opportunities (or at least not risks)’
 Provides certainty
 Support from private sector capital (and builders)
• Non-controversial asset class (compare prisons!)
• Opportunity to improve:
• learning environment
• educational outcomes
• community outcomes
• the economy – ‘building the knowledge economy
 Opportunity to improve quality of existing stock
 Opportunity to improve planning regime
• Demographics
 More students, particularly in urban settings. (NSW predicting
21% growth to 2031, 80% of which will be in Sydney)
 Students remaining in school for longer
• Needs / Expectations
• Changing teaching and community expectations
• Technology
 Maintaining (improving) educational outcomes
 Addressing societal and community challenges
• School Infrastructure
 Increasing urbanisation – will drive additional community uses
 Access to land / sites – particularly in areas of densification
 Large (and growing) existing stock - maintenance challenge

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Allens is an independent partnership operating in alliance with Linklaters LLP.
Key Delivery and Operational
Risks
Allens is an independent partnership operating in alliance with Linklaters LLP.

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Key Delivery and Operational Risks
• Delivery
 Speed – challenge of keeping up with demographic change
 Planning (Land) – lack of past planning
 Design – long term asset / changing needs
 School Year – completion
 Fit for Purpose – flexibility
• Operational
 Historical under-investment - backlog
 Consistency across School Districts – PPP vs other
 Role of Principal / School – where maintenance is
outsourced
 Community use – cleaning / damage / availability
 Innovation

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Allens is an independent partnership operating in alliance with Linklaters LLP.
‘Enabling’
Allens is an independent partnership operating in alliance with Linklaters LLP.

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Enabling Behaviour
• Planning
 What is needed?
 What needs to be done to ensure that happens
(reservations; requirements on developers etc)
• Stakeholders
 Teachers / Parents / Voters – need to ‘buy in’ to the vision
• Engagement
 Pipeline (certainty)
 Clearly articulated outcomes (not specifications)
 Fit for purpose procurement (likely various methods) and
packaging
• Transactions
 Consistent and reasonable risk allocation
 Quick and outcomes focused

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Questions?

14. 14Allens is an independent partnership operating in alliance with Linklaters LLP.