A 25-year lease has been signed between Durham University and Lothbury Investment Management, on behalf of Lothbury Property Trust, on its 418 student bedroom scheme at Sheraton Park.
Once completed, the development will add to Lothbury’s existing portfolio of student accommodation, which includes properties in Camberwell, Ealing and St Andrews.
The Sheraton Park scheme includes two buildings: Sheraton House and Neville House. Sheraton House is newly built – the development was funded by Lothbury – after the previous building on the site was demolished. It provides 191 bedrooms and a communal social area which spans 64,000 square foot. Lothbury also funded the conversion and refurbishment of the Edwardian-era Neville House. It will provide 227 bedrooms across 81,000 square foot.
In the development, which Lothbury hopes will achieve a BREEAM ‘Very Good’ rating, 406 bedrooms will be en-suite with shared kitchens and living facilities, while the remaining 12 rooms will be studio-type abodes. Within Sheraton House, there will be various amenity spaces – including large student lounge, group study rooms and a gym.
The construction of the project is scheduled to be completed this month, which has triggered the commencement of the lease. The buildings will begin to be occupied from the start of the new academic year, with students from Ustinov College, Durham University’s postgraduate college, filling up the bedrooms.
Sheraton Park is a mile west of Durham city centre, with easy access and good transport links connecting the two.
“This is a first-class development for a world-class, top 100 university,” Simon Radford, CEO of Lothbury Investment Management, said. “We put in place a strategy last year to increase weighting in the ‘Alternative’ sector and diversify our portfolios. The Fund’s exposure to this sector has increased from 1% to c. 8% currently.”
He added: “The Sheraton Park development is the last of a series of student accommodation buildings we have built and purchased over the last three years and completes the deployment of our current allocation to the sector.”
In recent years, Lothbury has added significantly to its student accommodation portfolio. It completed a 166-bed facility in Peckham Road, Camberwell - valued in excess of £20m - in September 2016. This was let in its entirety to Goldsmiths University on a nominations agreement.
The Fund also completed a new build 196-bed student accommodation building in Aberdeen last year, comprising two to eight-bedroom cluster flats and studios. This is in addition to the 100-bed Central Studios, Ealing and 135-bed East Sands, St Andrews assets which were acquired in 2015.
The Sheraton Park development brings the number of student rooms under Lothbury’s management to more than 1,000, with a portfolio of student accommodation that is currently valued at more than £100 million.
UPDATE: The scheme was completed and officially opened last week (Friday September 8) by Alumno Developments and Kier Group.