Unite Students and Newcastle University enter PBSA Joint Venture

Unite Students have entered into a contract to establish a joint venture with Newcastle University, aiming to provide 2,000 new student beds at the university's Castle Leazes site, subject to planning approval.

Planning for the joint venture is expected by the end of Q1 2024, enabling its formation by the year-end. The 2,000 new PBSA beds are set for delivery in 2027 and 2028. The existing Castle Leazes site with 1,250 beds, built in 1969, will be closed and undergo demolition this summer, as committed by Newcastle University.

This joint venture strengthens Unite's 20-year relationship with Newcastle University. Unite have also secured a four-year nomination agreement for 1,600 beds in other Unite Students properties in the city to meet accommodation needs during the development phase.

The project's total development costs are approximately £250m (£128m for Unite). Main construction is set to commence in early 2025. Newcastle University will own a 49% stake, contributing the Castle Leazes site on a 150-year lease. Unite's equity commitment is around £70m for a 51% stake, supplemented by debt secured against the joint venture. The project aims for returns in line with regional city developments, including fees for Unite as the development and asset manager.

"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

"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