UPP, University of Exeter Deal

In one of this year’s biggest HE construction deals, UPP have agreed on a long-term partnership with the University of Exeter to increase the amount of on-campus residential accommodation.

The project, reportedly £133 million’s worth will involve UPP designing, financing and operating new residential accommodation at three locations on the University of Exeter’s Streatham Campus and forms part of the University’s £450 million strategic investment programme.

The value of the construction contract is £77 million and construction will take place over three years from financial close, with the final phase due for completion in 2012/13. The transaction, the result of a competitive bidding process, will also generate a capital receipt for the University of Exeter for investment in the provision of its core teaching and research functions.

Jeremy Lindley, Director of Corporate Services at the University of Exeter, said:

“The deal with UPP is critical to the University's future development because we require extra student accommodation if we are to expand and develop in the years ahead. UPP are providing very high quality units, which is what the market wants, so this development will help to enhance the offer we make to students. The work also complements other developments which are underway to expand our Bioscience and Business schools and provide a new student services building in the centre of our Streatham Campus.”

Mark Quigley, Director of Structured Finance, Barclays Commercial Bank, said:

“Barclays Commercial Bank has been UPP’s main funder for over a decade and we are delighted to have provided £55m in senior debt, alongside syndicated partners. With Barclays expertise in financing student accommodation and a strong appetite for similar deals, we are able to help improve the supply of on-campus student accommodation at a time when more students than ever before are applying to go to university. This project will be one of the largest new builds of its type this year. UPP has a robust business model and strategy, and we are looking forward to providing future support.”

Sean O’Shea, Chief Executive of UPP, added:

“The scale of this transaction with the University of Exeter 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, delivered through UPP’s unique model, and we are securing record levels of private sector funding for our university partners.”

The UPP scheme with the University of Exeter is expected to relieve pressure on the local rented housing market in the City and benefit the local economy by delivering approximately 300 construction jobs during the construction period, 60 permanent jobs providing facilities management services to students and £29.5 million of continuing total spending into the local economy from students living in the residences.