City centre living beckons students

Developers are descending on Tyneside but instead of gleaming new shops or plugging the critical shortage of offices in Newcastle city centre they want to build student halls.

Developers are descending on Tyneside but instead of gleaming new shops or plugging the critical shortage of offices in Newcastle city centre they want to build student halls.

Nigel Stirling investigates plans afoot to shift student digs from the traditional areas of Jesmond and Sandyford to new, purpose-built accommodation in the city centre.

East Pilgrim Street

Tyneside is about to experience a student revolution . . . but it won't be long-haired radicals that will be manning the barricades, rather deep-pocketed property developers.

This month two developers - Bristol-based Unite and Belfast-based Vico Properties - have either secured sites, lodged planning applications or are in the final stages of working up plans for almost 2,000 new student beds in Newcastle city centre.

This number, probably to be built within the next two years, represents a quarter of the existing student beds in the city.

And while these schemes will undoubtedly bring upheaval to certain parts of the city, especially to the previously student-free area west of Newcastle Central Station, planners estimate it will satisfy only a portion of the demand created by Newcastle's two universities over the next few years.

According to Newcastle City Council's Shared Housing Working Group, established last autumn to review the city's student accommodation needs, another 6,000 beds are needed between now and 2011 to add to the 8,000 currently in the city.

Much of this - and certainly the sites secured by Unite and Vico - is on track to be built in the city centre, representing a major shift away from the traditional student suburbs of Jesmond, Sandyford and Heaton, on the eastern edge of the city centre.

David Furniss, head of property agent Atisreal in Newcastle, which is advising Northumbria University on its student accommodation strategy, said: "What the private sector like are sites that are close to campus, to be within walking distance of the universities.

"The days of the campuses being on the outskirts of the city, and kids being bussed in, are gone. So the developers have been looking to source them in and around the city.

"And the universities prefer them there because what they are looking to do is make sure that students are attracted to the city by as much as the lifestyle as the teaching."

But with any development in the city centre - especially Newcastle's - comes problems.

Unite, attracted by the prospect of lifting student rents to the levels of other regional university cities such as Edinburgh and Leeds and eager to spend buckets of cash pouring into property generally across the UK, first made its intention to target Newcastle known in late 2005.

The Bristol-based developer at the time said it had set aside £100m to spend on sites in Newcastle city centre in the following 12 months but by last May had yet to secure a site after missing out on UK Land's Tyne Bridge Tower which is to be re-let as offices.

Mr Furniss says student accommodation developers face a "tussle" with office developers at a time when the amount of new Grade A office space in the city centre is at an all-time low.

"Because of the locational criteria to be on the fringe of the city centre, within walking distance of the campus, they are actually competing with other major commercial projects," he said.

"At times, there are obvious sites which are much more valuable as office sites, but certainly around the fringes it is very competitive, with both sectors having a real tussle over the sites."

However, the predicted surge in student numbers, and the likely increase in rents this is likely to presage, means student accommodation developers have begun to bid more competitively on sites.

"The Blandford Square site [see panel] is the obvious example where the bids were from residential, office developers and student accommodation developers.

"The advantages that the student [developers] have is they get a greater density of room on there that don't need car parking, so you can add more income into your development appraisals," says Furniss.

Perhaps surprisingly given recent grumbling from the local property community over the same issue, municipal planning policy, according to developers, has not been - yet - a stumbling block to progress in meeting the city's student accommodation needs.

Increasing student numbers in "posh" residential suburbs such as Jesmond and Gosforth has created political pressure to address the problem of where to locate student accommodation. Newcastle City Council is expected to agree on new guidance on where development will be "actively promoted" by planners by September after selecting 50 possible sites last autumn "using a set of qualifying criteria which include accessibility to the campuses, capacity of the site and the overall regeneration benefits for the city".

Tim Mitchell, head of UK development for Unite, described the council as "one of the leading cities in identifying the situation and coming up with a strategy about how it is met and where [development] might be located.

"Certainly when we got into Newcastle, using our experience of where we know students want to live, targeting the right land was difficult. Newcastle is fairly constrained I would say in terms of sites available for student accommodation development in the city centre.

Mr Mitchell added: "Everybody has a vested interest in the market being supplied and coming through as quick as possible, including through the planning process. Because if there is an unmet need which we have identified today there will be continued pressure on the residential areas." All of Unite's sites - except its Pandon Bank scheme - have yet to go through the planning process, and, notably, its agreement recently to buy a site for 800 beds next to Metro Radio Arena from Benfield Motor Group was contingent on planning approval being granted. Developers, fearful of getting offside with local planners in the midst of considering plans for schemes, are always of wary of publicly slating local authorities.

And, while Newcastle has been proactive in tackling the issue of student development, the council's policy is still not set in stone, and there are already signs of a divergence between developers and the universities and the council over locations for development.

Atisreal's David Furniss warns: "There is quite a lot of resident concern. The idea of having 500 students on your doorstep is not something that appeals to everybody. Because all of these uses are converging on the same sites I think that the challenge for them [the council] is to identify the best sites for student development. And that is taking quite some time to deal with because there is quite a lot of public consultation that is required."

Developers and local agents will get their first chance to gauge the council's thinking - and portents to the likely shape of the final policy - when members of the Shared Housing Working Group hold a briefing at the offices of Newcastle agent GVA Lamb & Edge this Friday.

Harvey Emms, head of planning at Newcastle City Council, says the regeneration of the West End of Newcastle is looming as a safety valve for the thousands of students developers and the universities would prefer to see housed in the city centre.

"There is a great deal of potential inside and outside of the city centre. We are producing this guidance which will go to the next committee meeting which is the purpose-built student accommodation policy which highlights effectively about 50 sites city-wide.

"Effectively a lot of those sites are in the city centre but there are other sites which are just as accessible in our view; slightly more peripheral areas which are highly accessible by public transport."

However, Mr Emms maintains the new policy will be more developer-friendly than in the past, when there were fewer locational guidelines for developers to follow, therefore freeing up more available sites for property companies to build on.

"There has been a policy on student accommodation in the Unitary Development Plan since 2000. There has been a clear policy on where student accommodation should be." He added: "What has tended to happen is there have been some schemes that have been refused which some might have said were acceptable. The new policy is providing extra clarity on what sites the council would actively promote for student accommodation.

"The policy in the UDP wasn't site-specific, it was criteria-specific. That is where we have gone further," Mr Emms says.

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Newcastle City Council's top 10 sites for new student accommodation:

* Manors car park, Shieldfield;

* TA Centre and St George's car park, Shieldfield;

* East Pilgrim Street, Newcastle city centre;

* Former Tyne Brewery site, Newcastle city centre;

* New Bridge Street, Newcastle city centre;

* Newcastle University campus, Newcastle city centre;

* Northumbria University campus, Newcastle city centre;

* IRD site, Fossway, Walker;

* Scotswood Village, West End of Newcastle.

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