This blog from UPP, one of the Gold Sponsors for the AHUA Spring Conference 2025, highlights the benefits of effective partnership to streamline operations.
How can universities grow to meet today’s needs in a time of financial uncertainty?
UK universities are facing significant challenges, including increasing financial pressures, concerns about the future of international student numbers and operational difficulties due to an often-inflexible model. Dozens of universities are having to make difficult decisions with staffing and courses, with the Office for Students estimating that nearly three-quarters of higher education providers could be in deficit by 2025-26.
Despite this, the best universities want to continue to expand in order to keep attracting the best students and remain in demand. One way to square this circle is through a strategic partnership agreement, offering a number of proven ways for universities to grow or streamline their operations, while minimising their own risk.
A strategic partner can respond at pace to solve universities’ accommodation and estate challenges, such as rapidly developing new supply, working within an ambitious net-zero roadmap, or repurposing under-utilised estate assets.
Which model suits your university?
Traditionally, this has meant Design, Build, Finance, Operate (DBFO) schemes, designed in collaboration with universities and their students. These schemes can be incredibly efficient for universities, as they are off-balance sheet financing solutions, financed by a strategic partner in their entirety. The strategic partner will also take on the substantial risk of obtaining full planning consent.
Building on the benefits of a DBFO model, there are now new and innovative routes to deliver accommodation. This suite of new and evolving strategic partnership options includes development, redevelopment, retrofit and remodelling.
The redevelopment option involves sensitively integrating new and existing buildings, bringing new life to campuses. Meanwhile, retrofit and remodel allows universities to significantly improve building performance, utilising energy-efficient fabric solutions to create a new asset from an underused or ageing building.
Added to all of this, a facilities management operation delivered by a partner means universities can save money on vital services. For example, as UPP leverages our national scale with 15 university partners, we can deliver services often 30% cheaper than incumbent operators.
Securing highly competitive funding
Universities’ financial constraints mean these can be nerve-wracking decisions, but procuring higher education project finance is another facet that a partner can take on, utilising understanding of the sector to create robust funding options specifically for higher education institutions.
Partners can bring the track record to attract a wide range of investors and cost-effective financing terms from a range of sources to suit each individual project. Over the last two decades, UPP has deployed more than £3.5 billion of senior, subordinated debt and equity on projects across the country.
UPP Case Study: building a deep and lasting partnership in Exeter
Building on a long-term partnership with the University of Exeter, UPP are working on the development of West Park campus, which will be a market-leading development in sustainable design. The student village will be entirely gas-free and utilise zero-carbon technologies such as Air Source Heat Pumps and Photovoltaics. The new accommodation will be Passivhaus certified, which adopts a fabric-first approach to maximise energy efficiency and minimise the reliance on mechanical systems for heating and cooling. This efficiency means the West Park campus will deliver a 70% energy reduction against the sector norm.
Working with students to create a true home at halls
Universities will never lose sight of the fact that the estates they build, develop and operate are homes and workplaces for students. That’s why any strategic partner needs to put students first when working on university accommodation or academic space.
At UPP, we offer to design and host the student experience and residential life initiatives that universities are undertaking in our buildings. It’s this true spirit of partnership and putting the student experience at the heart of how we operate that means 88% of our student residents would recommend our accommodation, according to our most recent Customer Satisfaction Survey.
Universities don’t have to face their challenges alone, and a strategic partnership could be the way to free up time and money for an institution to do what it does best, for their students, staff, local community and the environment.
