Student accommodation specialist Unite Students and Newcastle University have contracted to form a joint venture (JV) to develop a 2,000-bed site at the University’s Castle Leazes site for delivery in 2027 and 2028.

The Castle Leazes site currently provides 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.

Unite Students CEO Joe Lister said: “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.”

Newcastle University executive director of finance Nick Collins said: “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.”

Unite Students said total development costs will be £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 £70 million for a 51% stake with the remaining funding coming from debt secured against the JV.

Unite Students said said the project is expected to deliver returns “comparable with developments in regional cities” and this “also reflects the fees Unite will receive as development and asset manager to the JV.”