LONDON (dpa-AFX) - Unite Students, the UK's leading owner, manager and developer of student accommodation, on Monday announced that it has entered into a joint venture or JV framework agreement with Newcastle University for the development of 2,000 new student beds.
Unite Students and Newcastle University have contracted to form a JV to develop 2,000 beds at the University's Castle Leazes site in Newcastle for delivery in 2027 and 2028. The Castle Leazes site currently provides about 1,250 beds and was built in 1969. Newcastle University has committed to close the existing accommodation on the site and commence demolition in the summer of 2024.
Total development costs are about £250 million, with main construction expected to commence 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 about £70 million for a 51% stake with the remaining funding coming from debt secured against the JV. Further, 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.
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