Audley secures £47m finance deal for Surrey retirement village

A venture between Audley Group, Schroders Real Estate and Octopus Real Estate has secured a £47m loan facility with Silbury Finance to develop a retirement village in Cobham, Surrey.

Alongside equity investment from Octopus Real Estate and Audley, the 26-month loan will fund the development of the consented 74-apartment Audley Fairmile scheme.

Audley Fairmile will be operated by Audley and will comprise of two-bedroom apartments, along with the Audley Club, including a pool, gym, restaurant and bar bistro.

Support services will be available on site and to the local community 24 hours a day through Audley Care.

The venture between Audley Group, Schroders Real Estate and Octopus Real Estate was formed in August 2019 to develop four retirement villages with over 500 units in total, representing a total value of £400m. The development in Cobham is the third project undertaken by the joint venture.

“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,” said Audley Group chief financial officer Gary Burton.

“The model has proven hugely effective at keeping older people safe and supported in their own homes,” he added.

The loan represents the first underwritten by Silbury Finance in the retirement living sector. Silbury Finance is backed by Oaktree Capital Management and launched in January 2021 to provide bespoke senior development finance solutions for structurally undersupplied UK residential, retirement and student accommodation sectors. 

“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,” said Silbury Finance founding partner Gavin Eustace.

“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,” he added.