Quantum Development Finance has provided £30 million in debt funding to Asset Capital for the development of Melbury Court, a 232-bed purpose-built student accommodation scheme in Durham. The project carries a gross development value of £46 million.
Caddick Construction will deliver the five-storey development on the northern edge of Durham, located a five-minute walk from the University Hospital and 10 minutes by bus from the university campus. Completion is scheduled for summer 2027, ahead of the 2027/28 academic year.
Supply constraints in Durham market
The scheme addresses a constrained supply situation in Durham, where planning restrictions including a city-wide Article 4 direction limit student bed availability. Few new purpose-built student accommodation beds are currently in the pipeline, whilst student acceptances at the University of Durham rose 22% for the 2026/27 academic year.
The facility marks Quantum’s second loan to Asset Capital in two years. The developer’s first Quantum-backed project, an £11 million loan for a 34-unit mixed-use scheme in Harrogate, completed in 2025.
Expanded lending capacity
The Durham financing follows Quantum’s announcement of a £500 million facility from Goldman Sachs, which brings the bank’s total funding capacity across Quantum projects to almost £700 million. The facility supports Quantum’s expansion into operational real estate, enabling the lender to back schemes across living sectors including purpose-built student accommodation, build-to-rent and other operational asset classes, whilst maintaining its focus on SME housebuilding.
Sam Hudson, head of portfolio management at Quantum, said: “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.”
Dan Newett, director of Asset Capital, noted that Durham presents challenges for new housing approvals and construction. “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 arrives,” he said.
The scheme will target a BREEAM Excellent rating and will include study rooms, a gym, a games area, a cinema and a private dining area alongside the 232 private living spaces. The development comes as property financing activity expands beyond traditional southern markets, with student accommodation remaining a focus for specialist lenders despite unchanged capital gains tax rates for property investors.
