LaSalle Provides $208M for UK Senior Housing Projects

A joint venture will use the loan to develop more than 250 units in the South of England.
Rendering of Stanbridge Earls main house. Image courtesy of LaSalle Investment Management

LaSalle Residential Finance (LRF), part of LaSalle Investment Management, has provided a $208 million loan (£106 million) to a joint venture to finance the development of two retirement villages in the South of England. The senior housing communities will have more than 250-for-sale residential units and be located in Stanbridge Earls in Romsey, Hampshire, and Sunningdale Park in Sunningdale, Berkshire.

The properties will be operated by Audley Group, a UK luxury retirement village provider that formed the JV in August with the UK Retirement Living Fund, managed by Schroders Real Estate and Octopus Real Estate. The JV plans to develop four retirement villages with more than 500 units for a total value of about $520 million (£400 million).

Jon Austen, CFO of Audley Group, said in a prepared statement the JV structure with the UK Retirement Living Fund allows the company to execute its senior living model in a less capital-intensive way while still offering the kind of luxury accommodations that are in demand in the market. The first two retirement communities will address the significant undersupply in the affluent markets of Romsey and Sunningdale to serve UK’s active adult population.

Daniel Pottorff, managing director of debt investments and special situations at LaSalle Investment Management, said in prepared remarks the firm worked with Audley in 2017, arranging a loan from the LRF program for development of an urban retirement property in Clapham, London.

LRF Program Extended

The loan to the JV comes after the LRF program received an additional capital commitment of $618 million (£476 million), increasing LRF’s total size to about $1.7 billion (£1.3 billion). LRF provides stretch senior and higher-leverage financing solutions for developments at loan-to-cost ratios of up to 80 percent, with loans ranging from $26 million (£20 million) to more than $195 million (£150 million). LRF’s current development lending activities include UK student housing, residential, hotel and healthcare lending and student housing in Europe. The program focuses on bed-based investments, particularly in sectors like senior living and build-to-rent, which are undersupplied.

Amy Klein Aznar, head of debt investments and special situations at LaSalle Investment Management, noted in prepared remarks the JV loan for the Romsey and Sunningdale retirement properties marks the 15th debt investment completed on behalf of the LRF program.