Unite Students announced that it has entered into a joint venture (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 c.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. The JV deepens the company?s existing 20-year relationship with Newcastle University. 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.

Total development costs are c.£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 c.£70 million 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. Entry into the JV is subject to planning approval.

Planning submission is expected by the end of First Quarter 2024, which would support formation of the JV before the end of 2024.