Unite strikes 2,000-bed deal with Newcastle University
The UK’s largest provider of student accommodation has entered into a £250m joint venture framework agreement for delivery at the Castle Leazes estate.
Unite Students will act as development and asset manager to the JV, with 51% of the shares. The firm will provide £128m of the £250m total development cost.
Delivery is inked in for 2027 and 2028. The Castle Leazes site currently provides around 1,250 beds and was built in 1969. This accommodation will be demolished this summer.
Architect Norr is working on the designs.
Joe Lister, Unite Students chief executive, said: “Partnering with Newcastle University to redevelop Castle Leazes and deliver 2,000 beds of high-quality, affordable accommodation for students is a hugely exciting step for Unite Students.
“The partnership will provide further support to Newcastle University in meeting their accommodation needs at a time of real housing shortage, so that they can focus on providing a world-class experience for their students.
“Unite Students is uniquely positioned to help address the shortage of student homes through our long-standing and trusted university relationships, best-in-class operating platform and in-house development capability. There is a significant opportunity to become the partner-of-choice for universities as they seek to unlock the potential of their campuses to deliver new accommodation and access new funding.”
Nick Collins, executive director of finance at Newcastle University, added: “We are delighted to partner with Unite Students to redevelop Castle Leazes. This joint venture will provide high-quality, affordable accommodation for our students and help us continue to attract students from across the UK and around the world to Newcastle University and our city.”
Uniute said it has had a relationship with NU, a founding member of the Russell Group, for 20 years.
To support the University’s accommodation requirements during the development phase, the Company has separately entered into a four-year nomination agreement for 1,600 beds in other Unite Students properties in the city.
The main construction phase is expected to start in early 2025. Newcastle University will own a 49% stake in the JV and contribute the Castle Leazes site on a 150-year lease.
Unite’s equity commitment is expected to be £70mn for a 51% stake with the remaining funding coming from debt secured against the JV. The project is expected to deliver returns comparable with developments in regional cities. This also reflects the fees Unite will receive as development and asset manager to the JV.
