The APG-backed LaSalle Investment Management UK residential finance fund has provided a £106m (€126.4m) development loan to the Audley Group and the UK Retirement Living Fund joint venture.
LaSalle said the loan provided by LaSalle Residential Finance (LRF) will be used finance the development of two retirement villages in Stanbridge Earls in Romsey, Hampshire, and Sunningdale Park in Sunningdale, Berkshire.
Together the two villages will comprise over 250 for-sale residential units for over-65s and amenities.
The loan follows an extension of the LRF fund by a further £476m capital commitment, increasing the total size of the LRF programme to £1.3bn.
Created in 2013, LRF’s current development lending activities focus on student housing, residential, hotel and healthcare development lending throughout the UK as well as student housing in Europe.
Daniel Pottorff, managing director of debt investments and special situations at LaSalle Investment Management, said: “We are delighted to have provided this financing solution to the joint venture which further strengthens our relationship with the Audley team, having extended a loan from the LRF programme to the group in 2017 for an urban retirement scheme in Clapham, London.
“This investment exemplifies our strategy of investing in demographically compelling segments of the residential market.”
In 2013, Dutch pension fund manager APG teamed up with LaSalle provide senior debt financing to residential projects and student housing developments.
Amy Klein Aznar, head of debt investments and special situations at LaSalle Investment Management, said: “We are excited to have further extended the LRF programme which continues to be backed by main investor APG.
“LRF focuses on bed-based investments and, in particular, on specific segments such as senior living and build to rent which remain structurally undersupplied. This is another example of our strategy of lending to market-leading sponsors to finance the development of best-in-class assets and marks the 15th debt investment completed on behalf of the LRF programme.”
The financing of the two developments follows the announcement in August 2019 that Audley has formed a joint venture with the UK Retirement Living Fund, managed by Schroders Real Estate and Octopus Real Estate, to develop four sector-leading retirement villages with over 500 units in total, representing a total value of around £400m.
Jon Austen, CFO at Audley Group, said: “We have a long-established track record of developing and operating retirement villages.
“Our JV structure with the UK Retirement Living Fund, managed by Schroders and Octopus Real Estate, allows us to execute our model in a less capital-intensive way while maintaining our first-class offering which the market continues to demand.”