Cheyne Capital targets £7.5bn raise for real estate lending

Alternative investment manager Cheyne Capital is preparing to raise a combined £7.5bn for the next phases of its Cheyne Real Estate Credit Holdings programme. The investment manager said the targets will “help fulfil UK and European borrower demand for funding solutions as real estate transitions to a higher interest rate environment and banks retreat further from real estate lending”. The firm is targeting a £5bn capital raise for its senior loan strategy, marketing the eighth launch in the CRECH programme. It will focus only on making senior real estate loans across core, core-plus, value-add and development assets located in the UK and Western Europe. Cheyne has also set a £2.5bn hard cap for its capital solutions strategy, which will similarly make senior loans as well as providing solutions across the capital stack. Those include subordinated debt, hybrid credit and commercial mortgage-backed securities. That strategy already has a £650m investor commitment and will be the ninth launch in the CRECH programme. The firm said the living sector remains its “highest conviction”, including affordable homes, purpose-built student accommodation, later living and senior care. It also favours the onshore industrial and technology-led sectors. In the office space, the firm said it will only support properties with the “strongest environmental credentials and a focus on employee wellbeing”. Some of its recent deals include the structuring of a £780m loan alongside JP Morgan to Quintain for the refinancing of Wembley Park; a £318m loan to Goldman Sachs-backed Riverstone for two later living developments in London; and £229m to Stanhope for its 76 Southbank, SE1, redevelopment. Ravi Stickney, managing partner and chief investment officer of Cheyne Real Estate, said: “The end of the zero interest rate environment brings a much-needed readjustment in asset values and the move to long-term necessary, productive assets and away from obsolete assets held up by low interest rates. We believe that this transition will take place over the next five years. “At the end of this period, the owners of thematic assets, providing for structural long-term needs, and with the highest environmental and social credentials, will thrive. This transition, however, will demand substantial capital and innovative, complex solutions.” CRECH made £2.8bn of loans last year and is on track to lend more than £3bn in 2023. To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews Photo © Stuart Bailey/Pixabay