Methodology for estimating the amount universities need to invest to improve the quality of their residential estates Note ii (to page 20) To quantify the overall investment requirement, we must make some assumptions. The quality classification itself is a broad measure, as each quality band represents a spectrum in itself. The investment requirement in any particular residence is also influenced by other factors that may not be immediately apparent. Some sites need little cosmetic work to compete with higher-quality contemporary accommodation, yet have underlying issues (often relating to fire safety or infrastructure) that require significant investment. Nevertheless, we can make some assumptions in order to reach a reasonable estimate of the likely required capital investment, on the basis that those sites requiring higher or lower levels of investment will balance each other out. For this analysis we have made the following broad assumptions: • Residences of Quality A or B require no investment at all, beyond standard maintenance and ongoing lifecycle spend, which is not captured here. • Residences of Quality C require a reasonably comprehensive refurbishment to demonstrably lift the perceived standard of the accommodation and address any underlying issues with building condition. This cost could vary significantly. Using data from comparable projects we have modelled an average cost of £45,000 per bed (or £52,500 in London). • For residences of Quality D the high level of refurbishment needed to bring them in line with contemporary accommodation, and the limitations of the resultant product, is such that demolition and complete rebuild is likely to be more viable. We have modelled a cost of £150,000 per bed (£175,000 in London). • These figures are outturn development costs rather than construction costs so allow for fees and irrecoverable VAT on refurbishment. • Naturally there will be many exceptions to this that could only be determined by full feasibility studies, for example where Quality C beds are justified in being redeveloped, or Quality D beds are capable of satisfactory refurbishment. • We also assume that refurbishment and/or redevelopment to the level required is actually possible, whereas in reality many sites will have constraints around planning and heritage, particularly in large historic institutions. • While it is usually possible to increase the number of beds on a site when completely redeveloping, to simplify this analysis we have assumed that beds are replaced like-for-like with no net increase. Page 46 | SFG | Meeting demand for modernised university-owned accommodation