Joint venture secures £52m loan to help build 128 retirement homes
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Fortwell Capital has financed a £52.1m loan facility to a Joint Venture between Audley Group and Schroders Capital’s UK Retirement Living Fund (ReLF) – advised by Octopus Real Estate – to develop a retirement village.
The loan will be used to fund the construction of Scarcroft Park, a 128-unit retirement village in Scarcroft, six miles northeast of Leeds.
Scarcroft Park, which will be operated by Audley Group, will comprise 22 cottages and 106 two-bedroom apartments.
It is the fourth project undertaken by the Joint Venture, (JV) which was formed in 2019 to develop best-in-class retirement villages with over 500 units in total, representing a total value of £400m.
The Scarcroft Park site was purchased, with full planning consent, by the JV in quarter two 2021, with construction set to start this month.
Fortwell Capital, a principal lender which has provided about £400m of funding to care home developers and operators since 2014, marks its first dedicated retirement village loan with this deal, as it looks to increase and expand the scope of its lending within the wider senior living sector.
Nick White, associate director at Fortwell Capital, said: “We are excited to expand our focus within the senior living sector to also include retirement villages, following a number of years when care home development in the UK was at the heart of Fortwell’s lending strategy.
“We firmly believe these types of high quality retirement village schemes are essential in the UK and will continue to require significant funding from alternative lenders to meet the required level of development.
Audley Group and ReLF are both exciting outfits and we’re looking forward to working closely with the respective teams to realise their brilliant vision in Scarcroft.”
The continued investment in retirement living is a direct response to the chronic undersupply of high quality retirement housing in the UK, where demand from an ageing population is fast outstripping the rate of purpose built development.
Gary Burton, CFO at Audley Group, said: “The demand for retirement village living has only increased over the last two years, and we are delighted to work with Fortwell Capital to begin development of the fourth project within our joint venture, bringing the Audley Group stable of properties to 14 completed and open villages, with a further five under construction.
“This new finance facility reflects the increasing interest and strong growth in the sector.”
Patrick Bone, fund manager at Schroder Real Estate Capital Partners, Schroders Capital, said: “With this new retirement village we are proud to contribute to the development of high quality facilities adapted to the growing older population’s needs in the UK.
“This development adds to an already strong pipeline of projects and we are looking forward to delivering more communities in the near future.”
Domas Karsokas, senior investment manager, Octopus Real Estate, added: “Scarcroft Park marks another exciting milestone for the UK Retirement Living Fund, both as the start of a new relationship with Fortwell Capital and the continuation of our partnership with Audley.
“We are very pleased to be working with both organisations on what will be a high quality development that will cater to the increasing demands of UK retirees for modern retirement living options.”