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Equity joint venture for the development of four new retirement communities

4

new retirement communities

500

new retirement units

£400 million

gross development value

The client and project

Audley Villages is the leading developer and operator of retirement communities in the UK. The group has over 25 years’ experience in providing high-quality retirement living. It serves more than 1,000 owners at over 20 locations. Audley was looking for a funding partner to support it in developing four new sites across the UK. 

Building large retirement developments, which include restaurants, gyms, pools and extensive grounds, brings high costs. These can undermine the growth of a successful organisation like Audley. 

We delivered funding through a joint venture with the Retirement Living Fund, which is managed by Schroders and advised by Octopus. Audley’s equity requirement is reduced to 25%, with 75% coming from the fund. After the apartments are sold, Audley can retain 100% of the operating business.

Our partnership

We agreed an innovative structure with Audley, to deliver funding when needed, while it maintains operations during and after development. We also included necessary equity protections for the fund. The structure also means that we don’t take any planning or operational risk. We acquire the sites once planning is in place and outsource the day-to-day operations to Audley. 

The partnership has provided Audley with equity for 500 retirement units across the four sites. Partners were also able to obtain third-party development debt, with LaSAlle providing a £106 million facility for the first two sites. 

The new communities we’re helping to create will set a standard that will really stimulate this area of the market. In working with Audley to deliver these for circa 750 residents, we’re also helping to free up around 500 family homes. 

“This strategy will deliver a positive social impact, through the improvement in the wellbeing of residents and the much-needed recycling of larger homes back on to the UK residential market.”

Patrick Bone, Head of UK Property Research, Schroders

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