Quantum Development Finance has agreed a £30 million loan to Asset Capital for the construction of a 232-bed purpose-built student accommodation (PBSA) development in Durham.
The funding will support Melbury Court, a five-storey scheme with a gross development value (GDV) of £46 million. Caddick Construction is delivering the project, which is scheduled for completion in summer 2027, ahead of the 2027/28 academic year.
The development is situated on the northern edge of Durham, five minutes’ walk from the University Hospital and approximately 10 minutes by bus from Durham University’s campus.
It will provide private student accommodation alongside communal facilities including study rooms, a gym, games area, cinema and private dining space. The scheme is being designed to achieve a BREEAM Excellent rating.
STUDENT HOUSING DEMAND
The financing comes against a backdrop of constrained student accommodation supply in Durham, where planning restrictions, including a city-wide Article 4 direction, have limited the pipeline of new PBSA developments.
Student acceptances at Durham University have increased by 22% for the 2026/27 academic year, adding to demand for accommodation in the city.
The transaction is the second between Quantum and Asset Capital in two years. Quantum previously provided £11 million towards a 34-unit mixed-use development in Harrogate, which was completed in 2025.
It also follows Quantum’s announcement of a £500 million funding facility from Goldman Sachs, bringing the bank’s total funding capacity for Quantum projects to almost £700 million.
The additional funding is intended to support Quantum’s expansion into operational real estate lending, including PBSA, build-to-rent and other living sectors, alongside its established SME housebuilding finance business.
FUNDING RELATIONSHIP
Sam Hudson, head of portfolio management at Quantum Development Finance, says: “We are delighted to support another project for Asset Capital. Dan and his team’s deep knowledge of the PBSA market continues to be proven invaluable as they have obtained an excellent planning consent and executed a coordinated delivery strategy.
“We look forward to supporting them on this scheme to get essential new student accommodation in place before the start of the next academic year.”
Dan Newett, director of Asset Capital, says: “Melbury Court will be built to achieve a BREEAM Excellent rating and will provide top quality accommodation and amenities for the University of Durham’s students for many years to come. Quantum has proven once again to be an ideal funding partner.
“Durham is not an easy place to get new housing approved and built, but Quantum got to grips quickly not only with our project but the dynamics in which we’re operating and structured a flexible facility that allows us to get work started on time so that we can deliver before next year’s new student intake arrive.”
