A major milestone has been reached on a £120 million student accommodation scheme in Sussex.

Balfour Beatty and the University of Sussex have achieved financial close on the East Slope Residences project, which involves developing a new student beds facility on the University's campus.

Features include providing bedrooms for 2,117 students as well as new student amenities and a Students' Union building.

Balfour Beatty will invest equity of almost £23m (80% of the project equity) in the scheme and will design, build, and operate the new residences for 50 years with the University acting as a co-shareholder investing circa £5.7m (20% of the project equity) and continuing their delivery of pastoral care and student administrative services.

Overall, £197m of finance has been raised through the largest wrapped bond issue in the UK new build student accommodation market and represents the largest UK wrapped inflation linked bond, post the financial crisis.

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The first phase of the scheme is expected to be ready for the start of the 2018/19 academic year.

University of Sussex Finance Director, Allan Spencer said, "We are delighted at the response of investors to the University's long term strategy and the funding structure developed with Balfour Beatty.

"The bond allows the East Slope Residences project to proceed and facilitates a key element of the University's strategy to accommodate more students on our campus and to provide high quality residences with more social space and amenities.

"The University has invested over £200 million in the last few years to redevelop our campus, with both landmark academic and residential facilities, as we continue to reinforce our position as one of the UK's leading higher education institutions."

Balfour Beatty Investments Director, Ian Woosey, said, "Balfour Beatty is delighted to have formed a strong partnership with the University and secured this level of funding. We believe the fact that a bond of this size was able to achieve such attractive pricing demonstrates the underlying strength of the sector.

"We look forward to providing the additional high-quality residences for the students at the University of Sussex, whilst maintaining the character of the natural landscape of the campus on the edge of the South Downs National Park."

(LM)