Dominvs Group, a London-based investor and developer, has finalised the UK’s largest ever forward-funding deal for purpose-built student accommodation (PBSA) with Scape.
The £173.25 mln (€205 mln) forward fund, advised on by Knight Frank, is the largest deal of its kind ever in Britain and, at 713-beds, will be one of the largest ever to be developed in London.
The Hammersmith site in west London was reworked by Dominvs after initial planning consent was secured for two hotels. One of these hotels went ahead and after the support of Imperial College London, Dominvs won unanimous consent from Hammersmith and Fulham Council in March to deliver the PBSA.
Preet Ahluwalia, principal at Dominvs Group, said: 'It’s a privilege to have worked alongside Imperial, Hammersmith and Fulham Council and the local community who collaborated with us to find real solutions which helped unlock this site and, above all else, worked for local people.
'The result is a milestone deal for the market with the creation of institutional-grade student housing alongside a new Premier Inn, underpinning our ability to create value across multiple asset classes.'
From hotel to student beds
Dominvs secured unanimous approval from planners after the engagement process with local residents. The firm had previously secured consent for two hotels to be delivered on the site. Due to market conditions as a result of the pandemic, the northern building was no longer viable as a hotel.
Dominvs assessed several alternative sectors, which resulted in them taking forward the PBSA scheme following discussions with Imperial College London. At the southern end of the site, Dominvs is currently delivering a 400-key hotel for Premier Inn. The combined scheme has a gross development value of £270 mln.
Dominvs achieved support from local residents through its Community Liaison Group which enabled residents to input into the PBSA design alongside architects Rogers Stirk Harbour + Partners (RSH+P). This resulted in a significant reduction of height from the originally consented hotel.
Flexible amenity space at the scheme will include study and seminar space, an onsite gym, a landscaped garden courtyard and space for pop-ups and events.
Adam Brockley, founder and global chief development officer of Scape, said: 'We are delighted to have secured this high-profile site in Hammersmith which will be a superb addition to Scape’s portfolio and allows us to bring our market leading product to west London.
'Dominvs have secured a fantastic consent and we look forward to working with them on this and other projects in the future.'
Surging appetite
The site is located close to Imperial College London’s White City campus and there is an intention that 50% of the rooms will be nominated by the University. Other local higher education institutions in proximity to the scheme include The London Academy of Music & Dramatic Art (LAMDA), the White City site of the Royal College of Art (RCA), and West London College.
The deal underlies surging appetite for PBSA, which experienced a 35% increase in transaction volumes in 2021.
Renewed confidence in the £72 bn UK student market is driven by students returning to campus post-pandemic, while the Universities and Colleges Admissions Service (UCAS) expects the number of international students to grow by two-thirds between 2022 and 2026.
Merelina Sykes, co-head of student property at Knight Frank, said: 'This is a hugely significant transaction for the UK’s PBSA sector.
'As the largest forward-funding deal to take place in the market to date, it not only demonstrates the real strength of UK student property, but also the need for developers and operators to meet growing demand for accommodation in the capital.'
