The name Dominus is increasingly familiar in UK real estate as a prime mover in hotels and student homes development. Less well-known is the remarkable story of the family that launched the business as a side project in 2011 under the leadership of founder Sukhpal Ahluwalia, a Ugandan refugee who arrived in London in the early 1970s and spent his first year in the country in shared accommodation.
Now 13 years old, Dominus has already navigated the aftermath of the global financial crisis and the pandemic to build an extensive portfolio with a £2.4 billion pipeline and 4 million square feet of purpose-built student accommodation, residential and hotel assets spread across the UK. It is a tale of resilience and entrepreneurial flair worth the telling.
Born in Kampala, Uganda, into an Indian Sikh family, Ahluwalia’s parents emigrated to the UK in 1972 when Sukhpal was 13 years old, to escape the persecution of the Idi Amin administration. As recounted by Ahluwalia, he spent his teenage years in the markets of Petticoat Lane and Liverpool Street building his business skills while often skipping school, something he professes to regretting.
Ahluwalia founded Euro Car Parts in 1978 after borrowing £5,000 from his father and securing a bank loan to buy a car parts shop in Willesden in London. The shop, originally called Highway Autos, was renamed Euro Car Parts a year later.
By 2011, the business employed 3,500 people across 89 locations and was sold by Ahluwalia to LKQ Corporation for £280 million. It remains a major concern with its trucks a regular feature on motorway journeys.
The Ahluwalia family launched what would become Dominus by buying a small portfolio of three hotels in Sheffield, Darlington and Dumfries. They had decided they would learn about real estate and hospitality by starting small and scaling up.
Jay Ahluwalia, who is a principal drector of Dominus, says the early years of Dominus focused on residential before there was a move to hotels via acquisitions in regional UK cities, including Manchester. "It was all about learning the ropes of the hotel and property world at first – about developing, refurbishing and rebranding."
Early developments included a Holiday Inn by Piccadilly Station in Manchester, and a couple of hotels by Aberdeen Airport.
The group initially begun by using its own equity and balance sheet for acquisitions, and has set up to be a long-term investor rather than a trader-developer., although it has completed selected disposals as it has moved more and more towards being a "Grade A" hotel owner, as Jay terms it. In recent times it has diversified its financing, announcing it had secured two senior loans totalling circa £400 million from global alternative asset manager Cheyne Capital to fund the construction of two purpose-built student accommodation developments in the City of London.
The first facility, to be built at 61-65 Holborn Viaduct, comprises 669 beds and sits close to several universities, including The London School of Economics, King's College London and Queen Mary University of London. More than a third of the rooms are allocated as "affordable accommodation".
It will also have a mix of cultural and affordable workspace targeting creative businesses, which will be leased free of charge by the Creative Land Trust. A large public roof terrace and a new viaduct connecting Holborn Viaduct and Snow Hill are also planned. The second loan will fund a new building at 65 Crutched Friars between Aldgate and Tower Hill, containing circa 800 beds, of which 35% will be affordable. The building will pointedly also house the Migration Museum in a three-floor, 30,000-square-foot space, an example of the group's commitment to placemaking.
In April it teamed up with Cheyne Capital Management again to buy 65 Fleet Street for an office-to-hotel conversion in the City of London in its first joint venture acquisition.
The price paid has not been disclosed but the joint venture is understood to have paid around £85 million for the 225,000-square-foot office building, which it bought from a private Hong Kong investor linked to plastics and car parts manufacturer Jing Mei Industrial Holdings. CoStar News first tipped the acquisition by Dominus in February. In Manchester Dominus has recently sold a £200 million student homes development at Medlock Tower to Greystar.
A watershed year was 2015 when the group completed the Crowne Plaza at Aberdeen Airport, and 2019 when the Courtyard at Marriott in Oxford, and The Dixon at Tower Bridge opened.
And then the COVID-19 led pandemic led to a rethink and change of gear in 2021, with the traumatic hit to the hotel industry that came causing the group to pursue student homes developments at assets originally earmarked for hotels. "The original focus was luxury resi then the focus became hotels with schemes in Oxford, St Paul's, Tower Bridge. With COVID and lockdown, we looked to diversify into student homes as an asset class. The point is city centre locations, near transport links, activity zones and universities are good places for hotels and student accommodation. Ultimately what we are interested in is mixed-use and urban renewal, and in placemaking and community."
Dominus is now a 50-strong business housed just off the Edgware Road, with big bold signs along the street advertising the business, and it is growing. Earlier this year it announced five hires as part of an ambitious growth trajectory. It wants to triple the size of the business and become London’s premier developer of purpose-built student accommodation, as well as expanding its portfolio with new hotels and ventures into the build-to-rent sector, and it wants to recruit leading industry figures to do that.
"The name Dominus," Jay explains "derives from the Latin for home, Domus."
Ahluwalia says the business has prided itself on its ability to spot opportunities where it can obtain planning for value add redevelopment or refurbishment, particularly via changes of use, most notably from offices.
The most recent example saw it gain consent in June for a 237-room hotel in a former office building in the City at 5-10 Great Tower Street, just west of the Tower of London. Here Dominus has worked with Studio Moren on a retrofit development that retains 100% of the building’s substructure and 70% of the building’s superstructure and facade. It says the building "minimises whole lifecycle carbon and reinvigorates and repurposes".
"We have a team that is skilled in asset management, in obtaining planning, in development, and is skilled in construction and operations too. We are very good at spotting buildings that are exceptional for conversion to hotels or PBSA space."
Ahluwalia says there is no evidence of this market in London becoming saturated or slowing down. "There is very strong demand in London for the most prime offices but for Grade B or lower offices there is a lot of opportunity for conversion and we have in-house planners who really understand this."
With the return of the leisure market in key UK city centres Ahluwalia said the business's hotels are performing very well, and the business is happy to take on the operational side.
"We may do a franchise on a hard brand basis such as with Courtyard by Marriott and Hampton by Hilton or on a softer basis with Curio or Autograph where we would take more control of the branding and so on. What we find in certain locations is that our clients want an upscale experience and we provide that."
Ahluwalia says Dominus has also funded other operators such as Premier Inns with Hermes or Sape student homes with APG.
"Our ambition is to develop and build critical mass because that is how you get economies of scale once you get past a certain point. But we don't over commit to one sector."
An example of the business's ability to be agile and explore other opportunities where it sees value is its acquisition of Chelmsford's The Meadows shopping centre.
"Shortly we will submit rejuvenation plans for the 8-acre site. There will be new retail and commercial and 700 to 800 homes. We are working with the local authority on what is appropriate and the good thing is the high street can be extended into the shopping centre as the shops in the centre of Chelmsford trade really well."
In term of its geographical appetite Ahluwalia says: "London is always a focus but other cities such as Edinburgh, Cambridge and Birmingham with strong university links and transport locations appeal. We acquire sites in the best locations. We like long-term assets that are defensible. We have built a reputation for moving quickly and executing, for being serious."
And vital too are cultural and community projects, such as the Migration museum in London, something undoubtedly bound up in the family's initial experience as refugees arriving and succeeding in the UK.