Cheyne Capital and Crosstree Real Estate Partners are providing £120m (€140m) of finance for a central London residential scheme.

The two lenders are finacing the development of 25 flats at Harcourt House in Cavendish Square by Harcourt Investments.

Cheyne Capital, which financed Brookfield’s CityPoint tower with Morgan Stanley late last year, is providing an £85m senior loan to Harcourt, while Crosstree has granted a £35m mezzanine loan.

Arron Taggart, director at Cheyne Capital, said borrowers in the UK are looking increasingly to flexible capital and tailored funding solutions for real estate projects, “particularly for those that are large and complex”.

“For us, this development is an opportunity to work in partnership with high-quality counterparties on a London project in a good location with strong risk-adjusted characteristics.”

Peter Macallan, head of structured development finance at Knight Frank Finance, which acted as financing agent, said there were “many speculative high-value residential development schemes” in the prime central London residential market unable to secure funding.

He said: “This deal underlines that there is still funding available for transactions with strong fundamentals from alternative non-bank sources.” 

The development is being managed for Harcourt Investments by Centreland, which has planning permission for the scheme after the property was acquired for £75m in late 2013.