UPP finalises Exeter accommodation deal

28 September 2009

University Partnerships Programme, the student accommodation and FM services provider, has completed a £133m transaction for work at the University of Exeter.

The project will involve UPP designing, financing and operating new residential accommodation at three locations on the University of Exeter’s Streatham campus.

The value of the construction contract is £77m and will take place over three years from financial close, with the final phase due for completion in 2012/13.

The University of Exeter is one of the UK’s most popular universities with around 15,500 students, including 5,000 postgraduates.

UPP will take over 980 rooms of the university’s existing accommodation stock, of which 621 will be retained and operated by UPP. The remainder will be redeveloped to provide around 2,000 new en-suite units of student accommodation on campus.

UPP’s transaction with the University of Exeter is a vital part of the university’s on-going £450m investment programme. It includes a £48m redevelopment of the centre of the Streatham campus called the Forum Project, a £25m investment in the business school and £18m for new facilities for biosciences.
 
Sean O’Shea, chief executive of UPP, said that the scale of this transaction with the university shows that the higher education sector is bucking the recession trend and that university accommodation is an increasingly attractive and stable investment opportunity.

“We work in partnership with universities to provide high-quality accommodation, facilities and long-term financial solutions and, despite the credit crunch, we are finding the financial community has a growing appetite for this kind of investment opportunity.

UPP has invested almost £1bn in the higher education sector and plans to invest a further £1bn over the next two years, a written statement from UPP said.

In January, Sean O’Shea, UPP group chief executive, told FM World that he believed the FM business would grow to £40 million, with UPP working with between 15 and 20 university partners.

The target was set at managing 35,000 student rooms producing a rent roll of £125m within three years.

At the time of the FM World interview, UPP was managing 17,000 rooms with a £65m rent roll.

O’Shea cautioned that his bullish prediction didn’t mean that FM sector is recession-proof. “But we have a robust model, and universities are stable organisations while student recruitment tends to increase in an economic downturn,” he said.