Unite Students enters JV with Newcastle University

Unite Students have contracted to form a joint venture with Newcastle University to deliver 2,000 new student beds.

Newcastle University's Castle Leazes site which will deliver 2,000 beds in a joint venture with Unite Students | PBSA News
Newcastle University's Castle Leazes site which will deliver 2,000 beds in a joint venture with Unite Students.

Owner, manager and developer of student accommodation – Unite Students – announces today (19 February 2024) that it has entered into a joint venture framework agreement with Newcastle University for the development of 2,000 new student beds.

The pair have contracted to form a joint venture to develop the student beds at Newcastle University’s Castle Leazes site in Newcastle. Entry into the joint venture is subject to planning approval.

Planning is expected to be submitted by the end of Q1 2024, which would support the formation of the joint venture before the end of 2024. The 2,000 new purpose-built student accommodation (PBSA) beds would then be delivered in 2027 and 2028.

The Castle Leazes site currently provides c.1,250 beds which were built in 1969. Newcastle University has committed to closing the existing accommodation on the site and start demolition in summer this year.

This joint venture deepens Unite’s existing 20-year relationship with Newcastle University. To support its accommodation requirements during the development phase, Unite has separately entered into a four-year nomination agreement for 1,600 beds in other Unite Students properties in the city.

“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.”

Joe Lister, Chief Executive Officer, Unite Students

The total development costs for the project is c.£250m (Unite’s share is £128m), with main construction expected to start in early 2025. Newcastle University will own a 49% stake in the joint venture and will contribute the Castle Leazes site on a 150-year lease. Unite’s equity commitment is expected to be c.£70m for a 51% stake, with the remaining funding coming from debt secured against the joint venture.

The project is expected to deliver returns comparable with developments in regional cities, which also reflects the fees Unite will receive as development and asset manager.

“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.”

Nick Collins, Executive Director of Finance, Newcastle University

Newcastle University is a founding member of the research-led Russell Group of Universities. It was ranked 37th in the UK by the Times & Sunday Times Good University Guide in 2024 and 110th in the QS World University Rankings 2024.