The Audley Group and the UK Retirement Living Fund (RELF) joint venture has secured a £47m (€54m) development loan with an Oaktree Capital Management-backed UK property development finance business.
The UK venture, managed by Schroders Real Estate and Octopus Real Estate, has secured the Silbury Finance funding for the development of the 74-apartment Audley Fairmile retirement village in Cobham, Surrey.
Alongside equity investment from RELF and Audley, the 26-month loan will fund the development of the retirement village, comprising two-bedroom apartments, along with the Audley Club, including a pool, gym, restaurant and bar bistro.
The development in Cobham is the third project undertaken by the joint venture formed in August 2019, to develop four best-in-class retirement villages with over 500 units in total, representing a total value of £400m.
The loan represents the first underwritten by Silbury Finance in the retirement living sector. Silbury Finance was launched last month to provide bespoke senior development finance solutions for property professionals active in the structurally undersupplied UK residential, retirement and student accommodation sectors.
Domas Karsokas, senior investment manager, Octopus Real Estate, said: “We are really pleased to be working alongside our joint venture partners and Silbury on what promises to be a market-leading UK retirement living development. The structure and terms of the debt sit well with the key feature of a retirement community development and will support returns to our institutional investors.”
Gary Burton, CFO, Audley Group, said: “The strength of the retirement sector has never been more apparent than in the last year. While the pandemic has negatively affected many real estate asset classes, retirement villages have never been in more demand.
“The model has proven hugely effective at keeping older people safe and supported in their own homes.”
Gavin Eustace, founding partner of Silbury Finance, said: “This is a landmark transaction for Silbury as we target £500m of lending this year, in a sector where we have significant experience financing schemes.
“The UK retirement living space is one of our high conviction calls due to its nascency and the associated reluctance of more traditional lenders and debt funds to underwrite mid-size development loans for experienced developers.”
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