Unite Students and Balfour Beatty have signed separate deals to develop university student halls with a combined worth of more than £400m.
Balfour Beatty is set to build 1,899 bedrooms with the University of Sussex in a £200m deal, while student-accommodation giant Unite announced a separate, £250m joint venture (JV) with Newcastle University for around 2,000 new beds.
Student accommodation has boomed as an industry in recent years, with activity across the sector increasing nearly six-fold in the three months to December to total £1.61bn.
Balfour Beatty’s agreement with the University of Sussex is made up of a £32m equity investment by the contractor, which is 81 per cent of the project equity. The university will cover the rest of the equity, while Balfour Beatty is raising £171m of wrapped bond financing to the project through private placement.
Balfour Beatty’s venture will also see the development of a new health and wellbeing centre at the West Slope Residences site, as well as new catering and retail facilities.
The contractor has committed to using modular construction techniques throughout the process, which it said will “significantly reduce carbon emissions” by decreasing the number of lorry journeys to and from the site.
Its public-private partnership arm, Balfour Beatty Investments, signed a 54-year-long contract with the university that will see it finance and maintain the site after completion. Work has already begun, with Balfour Beatty expecting the site to be ready for the start of the 2026/27 academic year.
Around 450 people, including 150 apprentices and graduates, will be employed on the scheme.
Unite’s project with Newcastle University will, meanwhile, see the developer replace the existing Castle Leazes site with a 2,000-bed block. The site currently has 1,250 student beds, but will close for demolition this summer.
Unite is providing £128m of the development costs with a 51 per cent ownership share, with the rest of the funds coming from debt secured against the JV. As part of the university’s 49 per cent stake it will provide the site – which it owns – on a 150-year lease to the new JV.
The student-housing company expects to submit a planning application by the end of the first quarter this year, which could see construction work start in early 2025.
Unite Students chief executive Joe Lister said: “The partnership will provide further support to Newcastle University in meeting their accommodation needs at a time of a real housing shortage, so that they can focus on providing a world-class experience for their students.”
