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hee magazine digital edition - March/April 2018

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The HE market

Universities increase turnover via business driven developments

The UK university sector grew by £2bn in one year, and it annual turnover now equates to £30bn overall, according to the latest figures from the Association of University Directors of Estates (AUDE).

AUDE’s annual report, ‘Higher Education Estates Statistics Report 2016’, which spans the academic year 2014-2015, shows that teaching income had risen by 6% per annum, while income from research increased by 12%. The two largest institutions in the UK each turnover in excess of £1bn per annum.

Estates growth

The university estate equates to 14.3m sqm, which represents an increase of 200,000 sqm on the previous year. During this time, numbers of research students increased by 10,000 and staff numbers increased by 2,000.

Capital expenditure for the year reached a record high of £2.75bn. This growth of 5.6% on the previous year was driven by investment in the estate in the knowledge that staff and students expect high quality and attractive facilities.

The AUDE report reveals university estates continue to expand. Individually, the universities of Manchester, Cambridge, Edinburgh, Oxford and Nottingham all have academic estates (excluding residential accommodation) in excess of 500,000 sqm.

Commercial deals

Universities’ income rose to £1,477 per sqm in 2014/15. For example, the University of Hertfordshire embarked on a strategy to boost income by securing commercial deals with businesses such as Ocado and Regus for office space, as well as commercial leases with bank Santander and the NHS which runs a GP clinic on campus.

Across the sector, examples are documented by AUDE of universities exploiting their estates in order to secure alternative funding streams outside of traditional routes. The University of Sheffield built workshops, laboratories and office space in Catcliffe near the M1 in a business park. The capital expenditure in Sheffield Business Park will deliver 4,000 jobs and generate over £210m per annum to the regional economy when fully developed.

Goals for estates departments

Driving efficiency, reducing costs, improving the estate, raising service levels and increasing the commercial income from the estate remain key areas of focus for estate directors.

Ambitious infrastructure spend plans

In the face of challenging financial conditions, the HE sector wants to invest over £17.8 billion in infrastructure projects over the next four years, according to new figures from HEFCE. If achievable, this would represent an average annual investment of £4.5 billion, 51% higher than the previous four-year average.

Latest news

Under-pressure universities could become housing developers, says consultant

Under-pressure universities could become housing developers, says consultant  » 

Universities acting as housing developers, taking over redundant NHS space and becoming much more integrated with their local communities – three developments that Kevin Richardson, Local Growth Consultant, HEFCE, believes are imminent and necessary.

£20 million awarded to develop an Institute of Coding to train next generation of digital specialists  » 

The HEFCE has awarded £20m to a consortium of more than 60 universities, businesses and industry experts to establish an Institute of Coding. The institute will create new degree-level courses to equip people with the digital skills needed for the economy.

Capital expenditure cuts planned at 25% of universities

Capital expenditure cuts planned at 25% of universities  » 

The latest report from the Higher Education Funding Council for England (HEFCE) on the financial health of the sector shows a big gap opening up between the capital expenditure plans of the best performing and those of less well performing universities.

Gleeds appointed to head technical advisory team on new MIM Schools Programme in Wales  » 

International property and construction consultancy, Gleeds, is to lead a team comprising specialist engineers Cundall, and design practice Scott Brownrigg, as technical advisors for Mutual Investment Model (MIM) projects in the second wave of investment in the 21stCentury Schools build initiative.

Other news

Higher education shake-up needed to meet the demands of Generation Z

Higher education shake-up needed to meet the demands of Generation Z  » 

AUDE, the Association of University Directors of Estates, has produced a report looking at how universities need to develop to meet the needs of Generation Z.

Overseas student numbers set to fall, says analyst

Overseas student numbers set to fall, says analyst  » 

The number of international students choosing to study in the UK is stagnating and may be poised to fall as a result of Brexit, says Eleanor Jubb, Policy Analyst, Universities UK.

Legal and General buys into Exeter

Legal and General buys into Exeter  » 

LGIM Real Assets (Legal & General) has acquired five student accommodation blocks and a high-quality academic facility at Exeter University for £76m.