Cheyne Capital provides £35m junior loan to Larkfleet

The financing is part of the UK residential developer's plans to expand its operations. HSBC provided the senior debt.

Cheyne Capital has written a £35 million junior loan to Lincolnshire-based residential developer Larkfleet Homes, to finance the firm’s UK expansion plans, PDI sister publication Real Estate Capital has reported.

The junior facility supplements senior debt which was provided by HSBC.

“Larkfleet had secured a number of attractive land opportunities but their existing senior debt facilities were proving a constraint on being able to take full advantage of the opportunities they possessed,” commented Rob Turner, head of real estate equity and debt at Cheyne.

Larkfleet will use the loan to expand its operations and invest in existing and new sites across Lincolnshire, Cambridgeshire, Northamptonshire, Rutland, Norfolk, Suffolk, and the south west of England.

“We are looking forward to working with Cheyne to expand the operation, and alongside HSBC as the senior lender, we consider we have a good lending team to deliver the management’s growth aspirations,” Karl Hick, CEO of Larkfleet Homes, said.

According to Larkfleet’s annual report to 30 June 2016, the company had an owned land bank of 1,193 units; land under option with outline or full planning of 776 units and a further 8,038 units under option.

“This is a chance to work with a proven management team who are building high quality mid-market housing in areas of the country with strong underlying fundamentals,” Scott Macdonald, real estate asset manager of Cheyne Capital, added.

By the end of June last year, Larkfleet Homes posted a turnover of €49 million with a net profit of €5 million.