41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 39
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
New development opportunities
University partnerships pipeline
In addition to our uncommitted pipeline, we continue to
progress a number of further development opportunities in
London and prime regional markets at attractive returns.
We continue to make progress with our strategy of delivering
growth through strategic partnerships with universities
where student numbers are growing fastest. Universities
increasingly view the availability of high-quality and
affordable accommodation as a barrier to their recruitment
and an important factor for students when considering
where to study. Reflecting the financial and operational
constraints faced by universities, there is a growing appetite
for strategic partnerships to address this need.
Reflecting increased funding costs, we are seeking higher
prospective returns on new direct-let schemes at around
7.5–8.0% in provincial markets and 6.5–7.0% in London. We
have lower hurdle rates for developments that are supported
by universities or where another developer is undertaking
the higher-risk activities of planning and construction. For
new schemes, increasing rental growth in our strongest
markets is supporting development viability. We also expect
moderating build-cost inflation and the opportunity to
renegotiate land prices to further enhance returns.
We have agreed to provide a temporary college for Durham
University at our 348-bed Rushford Court site in Durham,
while an existing college is redeveloped by the university.
Subject to planning, there will be additional welfare
and common areas to support college living. Following
completion of the redevelopment works at Hild Bede
college, it is expected that Rushford Court will become
Durham’s eighteenth college for a 30-year period, further
strengthening our partnership with the university.
We intend to deliver our three future London schemes as
university partnerships, in line with requirements in the
London Plan for the majority of new beds to be leased to
a Higher Education provider. Our two Bristol schemes will
be delivered as partnerships with the university, building
on our existing city-wide agreement with the university,
and helping to address an acute shortage of student
accommodation in Bristol.
In addition, we are in active discussions with a range of
high-quality universities for new partnerships which
we are looking to progress over the next 12–18 months.
These include discussions around stock transfer and
refurbishment of existing university accommodation as well
as new development both on- and off-campus. Our existing
university relationships through nomination agreements,
best-in-class operating platform and development capability,
as well as access to capital, provides us with a unique
opportunity to deepen these partnerships.
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