The University of Oxford is partnering with Legal & General on plans to build 3,000 homes and two science parks, with the firm putting in ?4 billion and describing the venture as a model for how other UK universities could attract finance to modernise cities.

Times ºÚÁϳԹÏÍø?revealed earlier this month?that Oxford had chosen an unidentified private sector partner for a major housebuilding plan, using university-owned land to provide homes for postdocs, postgraduates and staff in one of the UK¡¯s most unaffordable cities.

Now Legal & General, which manages over ?1 trillion of assets, has been announced as the partner. Oxford and Legal & General will create a 50:50 joint venture company, with the firm putting in ?4 billion of money over 10 years via its Future Cities fund.

Nigel Wilson, chief executive of Legal & General, told?THE: ¡°Whilst lots of our other industries [in the UK] have fallen behind and can¡¯t be thought of any more as being world-class, our universities are definitely world-class.¡±

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But he added that the cities in which UK universities are located have, London excepted, experienced ¡°under-investment for 20, 30, 40 years, particularly compared to the best cities in the world and indeed compared to London¡±.

While London ¡°has taken a lot of the capital required¡± for modernisation in recent decades, now other cities ¡°are going to get more capital to help them grow¡±, Mr Wilson said. Legal & General previously partnered with Newcastle City Council and Newcastle University to build the Helix housing, research and office space development.

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Mr Wilson said of the partnership with Oxford: ¡°We do see it as a model for other universities or other cities to follow.¡±

The ¡°initial business plan¡± for the Oxford joint venture is to build 1,000 units of ¡°graduate accommodation¡± in the city, 1,000 subsidised rental homes for university staff to the north of the city at Begbroke and 1,000 ¡°regular homes¡± for sale on the open market. The money will also finance the building of two science parks featuring academic space, commercial space and incubation space for university spin-out companies, plus an expansion of the Bodleian Library¡¯s bookstore at Swindon.

David Prout, Oxford¡¯s pro vice-chancellor (planning and resources) and former director general of the High Speed 2 rail project, told?THE: ¡°We just want to do our bit¡­to make life a bit better for our staff and also to help tackle the housing shortage that exists in Oxford.¡±

Mr Prout said the initial projects would take up a ¡°substantial part¡± of Legal & General¡¯s ?4 billion investment, but would not state the precise sum. He added that there was scope for ¡°future projects if the partnership goes well¡±.

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The University of Cambridge is building 5,000 homes, mainly for staff and postgraduates, helping finance its plans with a ?350 million bond.

Oxford has a ?750 million bond already being used for other purposes. Mr Prout said there was ¡°no need to take out more borrowing¡± when ¡°we can attract a private sector partner¡­who will fund the developments in exchange for the rental income stream over a period of decades and then at the end of that period give the buildings back to the university free of charge¡±.

Oxford and Legal & General will ¡°share the planning risk¡±, said Mr Prout. Cherwell District Council has allocated the land north of Oxford for housing, but planning permission is yet to be finalised. But the firm will ¡°take the build risk and indeed the demand risk¡±, making the scheme ¡°low risk¡± for the university, he added.

john.morgan@timeshighereducation.com