Sheffield University has secured a distinctive deal with the private sector to build and manage a student village that could offer a future model for other institutions seeking to replace ageing halls of residence.
The £160 million project to create 38 new blocks of residences for up to 4,200 students is backed by a £140 million index-linked 40-year bond guaranteed by Financial Security Assurance. It is believed to be the UK's largest transaction for student accommodation with a private-sector company.
According to David Fletcher, Sheffield's registrar and secretary, the deal between the university, investment company Catalyst and HSBC Infrastructure Finance, and Catalyst's construction partner Bovis Lend Lease, should provide Sheffield with enough high-quality student accommodation for the next four decades.
He said: "A lot of our existing accommodation is approaching the age of 40 and is in need of a major overhaul. We decided to go for a single transaction to address the problem rather than trying to deal with it on a piecemeal basis.
"Because we have financed most of it through a bond, it means we get better long-standing terms, and due to the nature of the transaction and the way we have passed on risk it takes the cost off the university's balance sheet."
The first phase of the village is expected to open in September, and the whole project is scheduled for completion by autumn 2009.
The accommodation, which will be maintained by estates management company Vita Lend Lease, will include rooms with en-suite bathrooms; IT, recreation and welfare facilities; and round-the-clock restaurants.
Dr Fletcher said: "Students today pay more and are therefore more discerning customers. They are looking for a quality experience, and that applies to where they live as well as the teaching they receive."
Scaling new heights: Sheffield University is to build a £160 million student village on the site of its ageing halls of residence.
Student Kayleigh Gratwick is pictured abseiling down Sorby Hall, due to be demolished later this year