Retirement living provider Audley Group has secured a five-year, £28.5 million financing facility, provided by investment manager Federated Hermes.

The loan facility will focus on six fully developed and sold-out villages within Audley Group’s portfolio.

The villages represent a range of maturities, from 23-year-old Willicombe Park to Audley Redwood, which has been open for five years. The financing facility utilises operating surpluses, meaning the more cash flow the villages generate, the more that can be advanced.  

Audley stated that this facility is “the first of its kind in the retirement living sector, where funding has to date focused on development and stock financing. [It] is therefore significant for both Audley Group and the integrated retirement community sector. It completes the financing landscape by providing a financing option for any stage of a village. Therefore, funds being raised from securitising sold out maturing and mature villages enables further investment into additional new villages, which accelerates the development of much needed units for a growing older population.”

Gary Burton, chief operating officer and chief financial officer of the Audley Group, said: “Our well-established track record as long-term operators of integrated retirement communities means that we are constantly striving to invest in both our current villages while also securing and developing our next sites. A holistic approach to the way IRCs secure financing is necessary if we are to succeed in our goal of increasing the provision of units for the UK’s ageing population. Our focus is to finance mature and maturing villages (and their secure and upward inflating incomes) to invest into new villages to bring more units to market.

 “I’m therefore delighted that Federated Hermes shared our vision and agreed to this first-of-a-kind financing facility. The demand for retirement villages is continuing to grow and the UK’s aging population means that the need for supply to start matching demand is ever-more urgent.”

Vincent Nobel, head of asset based lending at Federated Hermes, commented: “Our continuous effort to find strong assets managed by the best sponsors has resulted in the collaboration with Audley Group. We have structured a bespoke financing solution for some of the more established villages that Audley manages across the country. We have been consistently impressed with the high-quality of the product Audley offers, and look forward to working together with the team at Audley over the coming years.”

In August this year Audley Group and Senior Living Investment Partners (SLIP) agreed to acquire 100% of the long leasehold interest in a plot within the Brent Cross Town masterplan on which to develop a new retirement village as part of Audley Group’s Mayfield Villages. SLIP is a £200 million partnership between Pension Insurance Corporation and Octopus Real Estate.