Cheyne & Crosstree fund Cavendish Square scheme with £120m loan

Redevelopment of Marylebone mansion block to deliver 25 new apartments and a 19,000 square foot private medical facility

Cheyne Capital and Crosstree Real Estate Partners have stumped up a chunky £120m loan to fund the mixed-use redevelopment of a handsome block on Marylebone’s Cavendish Square.

Harcourt Investments has secured the financing to turn Harcourt House – which is just round the corner from Harley Street – into 25 high-end apartments and a 19,000 square foot private medical facility.

The firm snapped up the Edwardian number for £75m at the end of 2013, with planning subsequently obtained by development manager Centreland.

Cheyne has provided an £85m senior loan, with Crosstree weighing in with a c.£35m mezzanine. Knight Frank, which put the whole thing together as sole exclusive financing agent, said the deal “demonstrated the alternative lending sector’s ability to provide timely and innovative solutions”. The agency has been retained to advise on the development consultancy and sales.

Arron Taggart of Cheyne Capital: “This is the latest in a series of specialised financing solutions we have provided to borrowers in the UK who are looking increasingly to flexible capital and tailored funding solutions for their real estate projects, particularly for those that are large and complex. For us, this development is an opportunity to work in partnership with high-quality counterparties on a London project in a good location with strong risk-adjusted characteristics.”

Henry Davis, Chairman of Centreland: “Centreland is pleased to continue the excellent relationship with Cheyne to complete this outstanding development and excited to be starting a new relationship with Crosstree.”

Peter Macallan, Partner and Head of Structured Development Finance at Knight Frank Finance: “We are delighted to have partnered Cheyne and Crosstree to fund this transaction. Currently we are witnessing many speculative high value residential development schemes in PCL not being able to secure funding. This deal underlines that there is still funding available for transactions with strong fundamentals from alternative non-bank sources.”

Tom Dailey, Residential Development partner at Knight Frank: “This financing agreement will facilitate the delivery of Harcourt House, a new high quality residential scheme on Cavendish Square. The listed building will undergo a comprehensive refurbishment behind the classic façade and will provide a range of apartments, all of which will enjoy impressive views over the garden square. The sensitive design, overseen by Darling Associates, celebrates the heritage and volume of the period building, whilst delivering modern well specified apartments, including two new duplex penthouses. Marylebone continues to evolve as a sub market and we believe Harcourt House will be an important addition to this as it matures.”