Student rooms builder delays major projects

Aaron Morby 2 years ago
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Student accommodation specialist Unite has halted its project plans as it prepares for a £125m revenue hit on student rents during the coronavirus crisis.

RG Group was delivering the £195m Middlesex Street scheme on the city fringe in London that will be delayed by at least a year
RG Group was delivering the £195m Middlesex Street scheme on the city fringe in London that will be delayed by at least a year

Unite, which is forgoing rent on around 43,000-46,000 beds representing around 62-65% of all owned and managed beds, is pushing back its development pipeline by at least year.

The deferred delivery of 2021 completions and savings to 2020 completions will lead to a cash saving of £67m during 2020.

This will see a 900-bed scheme near Aldgate in London and a 416-bed scheme in Bristol being delivered by contractor RG Group halted.

For the remainder of 2020, there is £57m of cash to spend on finishing more advanced projects.

A Unite spokesman said: “Given the priority of conserving cash while income uncertainties remain, we have deferred the delivery of Middlesex Street in London and Old BRI in Bristol into 2022.

“A decision on resumption of capex on Middlesex Street and Old BRI will be made once we have greater visibility over the impact of Coronavirus on the 2020/21 academic year.

“We are reviewing the possibility of delivering 2022 completions ahead of the start of the 2022/23 academic year to generate income from short-term lets.”

Delivery of this year’s completions will also be delayed by temporary site closures and amended working practices.

Unite this morning confirmed that work has now re-started across all existing sites with reduced numbers of operatives to maintain social distancing, in accordance with recent Government advice.

The firm said: “A number of scenarios are being considered for completion of the projects, including phased delivery where possible.

“We are proactively engaging with our University partners to highlight these risks and will continue to monitor the situation over the coming weeks.”

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