Silbury Finance, the Oaktree Capital Management-backed development lender, has signed off on a £64.3 million loan to support the development of a 124-residence luxury retirement scheme in How Wood, St Albans, being delivered by Elysian Residences.
The deal, which finances a joint venture established by Elysian Residences and Senior Living Investment Partners, itself a partnership between Pension Insurance Corporation and Octopus Real Estate, will kick-start work to build 80 apartments and 44 two-bedroom bungalows, in addition to a restaurant, cafe and library. A wellbeing and therapy centre, cinema, village green and orchard gardens are also included in the plans.
Silbury has now provided more than £550 million to 11 different borrowers across the retirement living and build to sell sectors in less than two years, for projects totalling a gross asset value of £820 million. Around £220 million has been "sustainability linked", incentivising borrowers to deliver schemes to high environmental standards, it adds.
Silbury Finance founding partner Gavin Eustace said: "Silbury was launched in direct response to the paucity of highly experienced, well-funded and sustainability-focused lenders in the mid-ticket residential development space.
"Exacerbated by the retrenchment from the sector caused by the COVID pandemic, we have witnessed unprecedented and increasing enquiry levels from a range of borrowers, from global institutions through to dynamic regional SMEs, for our bespoke capital solutions.
"We retain a high conviction in the structurally undersupplied living sector, which continues to demonstrate attractive countercyclical characteristics and is underpinned by highly favourable demographic and societal drivers.
"Backed by a deeply experienced global real estate investor in Oaktree, and with further market dislocation likely as result of the challenging economic backdrop, we have ambitions to accelerate our deployment in 2024. Whilst remaining highly disciplined in our underwriting, we have a strong pipeline of borrowers seeking flexible funding solutions for high quality and environmentally responsible schemes.
Domas Karsokas, investment director at Octopus Real Estate, said: "We are pleased to be moving forward with the development of what will be a market-leading retirement community, alongside Elysian, PIC and Silbury. All businesses recognise the need to deliver IRCs at pace, and share some of our core values, particularly in terms of sustainability. The structure and terms of the debt are well suited to a development project and will support returns to our institutional investors.”
Chief executive at Elysian Residences Gavin Stein said: "Careful consideration of the market has revealed St Albans to be a prime location for development of a luxury retirement scheme, with strong demand anticipated from local people aged 65-plus whose choices are limited in the immediate area. As a market leader in the provision of luxury retirement developments, Elysian Residences will set a new standard within the St Albans market and challenge existing perceptions of retirement living."
Enquiries
FTI Consulting
Richard Gotla, Giles Barrie
07904122207 / silburyfinance@fticonsulting.com