What Slowdown? This Investor Has Done £2B Of London Deals This Year
Cheyne Capital has provided a £115M senior debt facility for a City of London office redevelopment, a transaction that takes its London debt and equity deals past £2B this year.
Investment manager Castleforge secured the loan from Cheyne and Apollo Global Management to redevelop 1 Golden Lane. Acquired by Castleforge in November 2021, Grade II-listed 1 Golden Lane is between the Barbican and Golden Lane estates in the City. The redeveloped scheme will offer 120K SF of office and be renamed Uno.
The scheme is slated to be finished in the first quarter of 2026, with 95% of the development's existing structure retained to cut down on embodied carbon.
The deal is the latest in a string of seven transactions that has seen Cheyne lead £2B of London debt and equity deals this year, primarily in the development field.
Cheyne runs funds and mandates that typically provide senior debt, mezzanine debt, preferred equity or equity for deals. One of the backers of its funds is the Abu Dhabi Investment Authority.
In its largest deal, Cheyne provided a £525M senior loan to refinance four London hotels owned by Fattal Hotel Group.
The four hotels — NYX Hotel London Holborn, Leonardo Royal Hotel London City, Leonardo Royal Hotel London Tower Bridge and Leonardo Royal Hotel London St Paul’s — operate under the Leonardo Hotels brand.
On the equity side, it has bought two student accommodation schemes in joint ventures with partners. It acquired a £275M, 650-bed purpose-built student accommodation scheme in Brent Cross Town in north London in a joint venture with developer Fusion Group, with planning to be submitted this quarter. Cheyne also picked up a £400M, 998-bed scheme in Wembley, also in north London, in a joint venture with Regal. That scheme is scheduled for completion in 2027.
Cheyne provided £400M across two senior loans to developer Dominus to fund two developments with a total value of £800M: a 669-bed student accommodation scheme in Holborn and an 800-bed student scheme in Aldgate, on the eastern fringe of the City.
And in January, it provided a £143M loan to Riverstone to fund the development of a 93-apartment senior living scheme on The Bishops Avenue in north London.
Cheyne said it funded the purchase of the 1.4M SF Vauxhall Square mixed-use project in south-west London by Cedarstone Capital Partners, but it did not disclose the size of the loan. It is likely to be significant given the size of the scheme.
“The capital solutions strategy aims to help the European real estate industry transition away from increasingly obsolete assets supported by low interest rates and towards productive, sustainable assets for the long term,” Cheyne Managing Partner Ravi Stickney said in a statement when the ADIA equity investment was announced.
“With an enormous pipeline of future investments requiring funding, we look forward to continuing to address this need as we open the strategy up to other investors in 2024.”
In regard to the 1 Golden Lane deal, Castleforge founding partner Michael Kovacs said high-profile firms need top-notch office environments, “especially at a time when employees are now either in the office full time or hybrid working and require exceptional sustainability certifications to keep pace with ESG commitments.”
