Silbury Finance provides £55m development loan for UK Retirement Living Fund

By Bridging Loan Directory 7th October 2021

Silbury Finance (“Silbury”), the development lender backed by Oaktree Capital Management, has provided the UK Retirement Living Fund (“ReLF” or the “Fund”), which is managed by Schroders Capital and advised by Octopus Real Estate, with a £55 million senior loan to fund the development of a luxury retirement village.

The 103-apartment scheme in Berkhamsted, Hertfordshire, is a joint venture (“JV”) between ReLF and Elysian Residences (“Elysian”), the UK luxury retirement living specialists.

Alongside equity investment from ReLF and Elysian, the 36-month credit facility will fund the acquisition and development of the retirement community in what is a prominent suburban location, one mile from the centre of the affluent market town of Berkhamsted and 26 miles northwest of London.

The new purpose-built retirement village will be developed and operated by Elysian Residences, and will provide 103 apartments and hotel-style facilities including a double-height lobby, restaurant, bar, library, function room, gymnasium and treatment rooms, with homeowners able to access 24-hour care if required.

Designed to create a thriving community, the new development will provide elegant, interconnected pavilion buildings, designed in a contemporary style, with the living spaces opening onto terraces, landscaped gardens and mature trees.

The joint venture was formed in February 2021, to bring forward market leading retirement communities, providing age exclusive new homes for retirees.

The Berkhamsted development, which is due to open to residents in Q4 2023, represents the joint venture’s first scheme, as it targets a £200 million Gross Development Value portfolio.

The loan represents the second underwritten by Silbury Finance in the high growth retirement living sector and takes its total lending to £160 million since it launched in January 2021.

Backed by Oaktree Capital Management, Silbury provides 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, commented:

“Working closely with our joint venture partners and Silbury, we are pleased to be taking the next steps in the development of this market leading UK retirement living development in Berkhamsted.

The debt facility marks our second this year with Silbury, whose expertise in the sector complements our own within the joint venture.

The pandemic has further demonstrated the benefits of community living and retirement villages, and so we are pleased to proceed with this latest development and go some way to fill the demand for this type of housing and unlock the potential in this sector for our investors.”

Gavin Eustace, Founding Partner of Silbury Finance, commented:

“Despite the unprecedented and challenging backdrop, we have enjoyed a strong 2021, partnering with a number of high-quality sponsors as we remain on track to meet our year end lending target of £350 million.

A central thesis behind launching Silbury Finance was that this part of the debt market is critically underserved, which we are seeing first-hand, as evidenced by the £1.2 billion of enquiries we have generated since launch.

Whilst the UK retirement living sector remains a compelling investment opportunity, the underwriting process can be complex and requires deep sector expertise, which is where we believe we can differentiate ourselves from the peer group.

Octopus Real Estate and Elysian have a proven track record of developing and operating successful retirement communities across the UK and we are excited to be supporting them as they look to expand their footprint.”

Patrick Bone, Fund Manager at Schroder Real Estate Capital Partners, Schroders Capital, said:

“The Berkhamsted development, alongside our existing schemes, has created a portfolio of six of the highest quality, and geographically-diverse retirement community schemes across the UK.”

Gavin Stein, Chief Executive Officer, Elysian Residences, commented:

“We are delighted to be progressing the development in Berkhamsted in partnership with the UK Retirement Living Fund and Silbury Finance, bringing over 100 new apartments to this key demographic, and working with other experienced capital partners within our sector.

This is our eighth retirement village (at different stages of development) and Elysian Residences is actively looking for new sites and investment opportunities at all stages, as part of our vision to be the foremost provider of inspiring and elegant retirement communities in the UK.”