Local NHS workers are rejoicing as they settle into Elderberry Walk, a Southmead based development delivering 161 new homes in Bristol. The collaborative effort involving BBRC Homes, Cheyne Social Property Impact Fund, Brighter Places Housing Association, and Bristol City Council aims to provide affordable housing for locals and key workers.

BBRC Homes has secured 61 properties on a long lease, including 21 with a 10 per cent discount for key workers, 27 for long term market rent, and 13 Rent to Buy homes. The completion of the final 24 one and two bed flats, now available for key workers and open market rent, marks a milestone in the project.

For key worker flats, prioritisation is based on local connections, family ties in Bristol, and income thresholds, targeting low to middle income earners. The six two bed flats for open market rent generated immense interest, with 54 applications within the first 36 hours, and 90 per cent now occupied.

Ed Rowberry, CEO of BBRC Homes, praises Elderberry Walk as a groundbreaking scheme addressing the city’s housing crisis. The development received accolades, winning ‘Best large scheme in planning’ at the National Housing Awards and earning recognition from the World Economic Forum.

Ajeesh Abraham, a care assistant at Southmead Hospital and one of the new tenants, expresses joy over the convenient location that allows walking to work. Medeah Ankrah, a health care assistant, appreciates the proximity to her workplace and the inviting atmosphere of the estate.

Elderberry Walk, initiated in 2017 and set to complete by the end of 2023, emphasizes sustainability with an EPC B rating for all units and promotes healthy living through cycle routes, green spaces, and food production opportunities. The development offers six home types to foster a diverse community.

In light of the persistent housing challenges in the UK, particularly in the South West, where median house prices are 10 times median salaries, Elderberry Walk stands out as a vital solution addressing the growing need for affordable and quality housing in Bristol.

Real Estate Credit Investments Ltd (LON:RECI) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview.

Q1: Your recent report on Real Estate Credit Investments sits behind a disclaimer, what can you tell us about that?

A1: It is just the standard disclaimer that many investment companies have. In essence, for regulatory reasons, there are some countries (like the US) where the report should not be read. It is not a simple asset class, and the report should only be looked at by professional/qualified investors.

Q2: Your recent report was called ‘Portfolio management to optimise risk/reward’, what can you tell us about it?

A2: In previous notes, we have reviewed why we believe the fund has procedures and practices in place that limit downside losses to help ensure the resilience of the NAV.

In this note, we explore further how portfolio management helps optimise risk/reward with a dynamic approach to bond portfolio allocation, leverage, top 10 concentrations, geographical sectors, and duration.

Their portfolio is not a static, long-duration, totally illiquid book. The key message that we believe investors should take away is that they are an actively managed portfolio where Cheyne’s footprint and average loan life of just 1.5 years allows them to rapidly take advantage of opportunities as they arise.

It is a balanced management with, for example, the overall level, and mix, of leverage reflecting Cheyne’s view of the risk/reward at any time.

In terms of what this brings to investors, we highlight that Company’s NAV performance was recognised in the recent Citywire award.

Q3: So, tell us a bit more about what has changed in the asset mix of portfolio?

A3: Since 2016, the book has been migrating towards an all-senior loan book. The move to senior debt has involved not only a shift from mezzanine and other loans but also, in 2023, a re-allocation away from bonds.

The chart in our report shows how this has progressed through the year with the gross value of bonds just over a tenth of that at the start of the year. The advantages of being senior debt include being repaid earlier in the event of customer difficulties, and retaining absolute governance, covenants and control from its bilateral singular lending relationships. The Cheyne-controlled weighted average LTV on total portfolio by commitment value is around 60%. These three factors mean that the loss in the event of default is reduced.

Our note also examines how Cheyne has changed the sector, geographical, and duration mix, as well as how the top exposures have changed over time.

Q4: And leverage in portfolio has changed too, what has happened there?

A4: The fund has used different types of leverage for different assets, with the market bond portfolio significantly funded by REPOS and the use of asset-specific finance with some loans.

There has been a sharp reduction in overall leverage throughout 2023, from 36.2% NAV in January to 20.9% in October. They have chosen to reduce leverage during more uncertain times, bearing in mind the pressure from the rise in cost of funds (balance sheet leverage average cost up 2.7% on January 2023). Lower leverage in uncertain times is not a one-off and has been seen before (end-2018 balance sheet leverage 38.1% NAV reduced to 21.6% end-2020).

Secondly, the mix has changed with the increasing prevalence of asset-specific finance, which, typically, is longer term but whose cost has increased less than short-term REPOS.

Q5: What was the award it recently won?

A5: Real Estate Credit Investments won the best performance award for Specialist Debt at Citywire’s London-listed Investment Companies awards in November 2023. The award is given to the investment companies judged to have delivered the best underlying return, in terms of growth in NAV, in the three years to 31 August 2023.

Q6: And the risks?

A6: The risks of a recession are clear to see, with higher interest rates, lower disposable income, falling property prices (both residential and commercial, compounded by distressed sellers of assets), rising social tensions, governments facing large fiscal deficits and central banks’ inflationary pressures.

Real Estate Credit Investments Limited (LON:RECI), a non-cellular company incorporated in Guernsey, has announced that its Investment Manager’s monthly Fact Sheet as at 30 November 2023 is now available on the Company’s website at:

As at 30 November 2023, the Company was invested in a diversified portfolio of 35 investments with a valuation of £322.6m.

Due to severe disruption in the German real estate and banking market from the collapse of Signa, RECI has reassessed the recovery valuation on a legacy mezzanine position exposed to a Berlin asset. RECI has therefore conservatively marked this asset down, reporting (but not realising) a small loss equivalent to 1.1p per share against the NAV.

Cash Balance as at 30 November 2023 was £16.9m.

RECI continues to take advantage of the highly accretive wider opportunities in senior mortgage lending.

A dividend of 3.0p per share was declared on 29 November 2023, to be paid on 5 January 2024.

A full attribution of changes in the NAV per share is presented in the table:

October NAV

148.4p

Interest income

1.0p

Asset valuations

(1.1)p

FX

0.1p

Expenses

(0.3)p

November NAV

148.1p

Real Estate Credit Investments Limited (LON:RECI) is a closed-end investment company that specialises in European real estate credit markets. Their primary objective is to provide attractive and stable returns to their shareholders, mainly in the form of quarterly dividends, by exposing them to a diversified portfolio of real estate credit investments.

• It expects to grow 25% at the end of this year and exceed pre-Covid 19 sales
• Obtain financing to continue with your activity and refinance your working capital

Farggi , the Catalan company known for being the owner of La Menorquina ice cream , has reached an agreement to obtain financing for its business plan, on the one hand, and refinance its working capital, on the other, after reaching an agreement with the debt fund American Taconic Capital. The horizon of the company, which during the pandemic received the support of the Cheyne Capital fund , its main shareholder, is to reach 105 million euros in revenue by the end of 2023, the year in which it will also end with 22 production lines and one extended presence in 40 countries.

After this operation, advised by Arcano’s debt team, the Catalan company achieves more visibility to undertake its strategy. To begin with, in January of this year it managed to get Cheyne, its main shareholder, to approve a contribution of more than 12 million euros to cover its working capital needs and prepare this year’s campaign.

Of the total amount, the majority was achieved through a participatory loan and the remaining amount through lines of credit with financial institutions and with a guarantee from the fund itself. “With this financing, Lacrem (Farggi) will be able to continue responding to its clients and capture the good growth prospects it has for the coming years ,” company sources explain.

Now, Taconic is breaking in to relaunch the company’s business plan, although it has not participated alone in the operation, sources with knowledge of the matter say. This debt fund is known in Spain, among other things, for having become the largest creditor of the highways that were privatized and later bankrupt. The American group has also obtained credits from financial entities in other projects, such as the unpaid debt of the Valencia Marina.

Farggi results

From January to March of this year, the company’s results have improved and even exceeded the figures previously budgeted for this year. Thus, in 2023, Lacrem has managed to close the year for the third consecutive year with growth equal to or greater than 25% and achieve sales 1.8 times higher than those recorded in 2019. “This high growth is the fruit of the effort made in the recent years to consolidate itself in the Spanish market as the first Spanish own-brand ice cream manufacturer,” Lacrem sources add in this regard.

This milestone has been possible thanks to a plan executed by management, which ranges from improving industrial costs to greater efficiency and productivity of manufacturing lines or reinforcement of supervisors’ manufacturing lines, according to the latest report. available in the Commercial Registry.

In the same documentation it was already revealed that Farggi was evaluating new financing models to strengthen its structure and renew the debt with banking entities on time , as well as allow the necessary financing due to the “high growth” that the company was experiencing.

Farggi, which was founded 80 years ago by the Catalan family that gives its name to the group, the Farga, now closes a new milestone after having overcome the turbulence of the coronavirus , which forced its current owner to explore a loan of up to 70 million through the fund articulated by SEPI (Fasee) for strategic companies.

Dunas Capital ha encargado a Invertica Real Estate S&P el asesoramiento, gestión de la demanda y comercialización del Parque Tecnológico Logístico de Noblejas (Toledo). Se trata del mayor desarrollo logístico actualmente disponible en el centro de España. Cuenta con una superficie de parcelas de 2.483.000 m2 de suelo industrial y una capacidad de construcción flexible para adaptarse a demandas de hasta 700.000 m2 de superficie de suelo. 

Este parque busca la creación de actividad empresarial y empleo en la zona mediante una rápida implantación industrial y de servicios logísticos, lo que se consigue con una estrategia de comercialización abierta, tanto para operaciones en régimen de venta, ya sea de suelo o de instalaciones construidas, como arrendamientos en formato llave en mano. Es en este último formato donde mayor interés está habiendo, como el reciente acuerdo con Ontime para la construcción de un edificio logístico de 51.000 m2 de superficie, cuya puesta en operación se proyecta para el primer trimestre de 2025.

Parque sostenible

Tras recibir financiación de más de 50 millones de euros de la gestora internacional Cheyne Capital Management, las obras de PTL Noblejas ya han comenzado. El proyecto ha sido diseñado para cumplir con estándares ESG, teniendo como objetivo la neutralidad en huella de carbono. El parque en sí será uno de los pocos parques logísticos certificados por BREEAM en Europa, lo que permitirá a los inquilinos obtener las máximas certificaciones medioambientales. 

Además, contará con una planta de energía solar fotovoltaica, utilizará materiales ecológicos para la construcción de carreteras, incluye más de 34 hectáreas de parques, 200.000 m2 de parcelas destinadas a instalaciones y servicios, implementa tecnologías de reciclaje de agua de lluvia y contará con estaciones de carga de vehículos eléctricos. 

Para Invertica IRELS, es una oportunidad para seguir creciendo y demostrando su posicionamiento como asesor inmobiliario logístico e industrial en proyectos de envergadura. En los últimos años, ha asesorado grandes operaciones de alquiler o de venta de suelo para uso logístico e industrial.

Opalesque Industry Update – Global alternative investment manager, Cheyne Capital, is preparing the next iterations of its Cheyne Real Estate Credit Holdings (CRECH) programme to 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 areas in which Cheyne believes new debt funding solutions will be most needed are i) senior lending and ii) recapitalisations, and the firm’s Senior Loan and Capital Solutions strategies are focused on these two opportunities. The Senior Loan strategy will focus only on making senior real estate loans across Core, Core+, Value-Add and Development assets located in the UK and Western Europe. This will be the eighth launch in the CRECH programme and will target a capital raise of GBP5 billion. The Capital Solutions strategy will also make senior loans and, in addition, will also provide comprehensive solutions across the capital stack, including subordinated debt, hybrid credit and commercial mortgage-backed securities (CMBS). This strategy already has a GBP650 million investor commitment and will be the ninth launch in the CRECH programme with a hard cap of GBP2.5 billion.

Ravi Stickney, Managing Partner and CIO of Cheyne Real Estate, said: “The end of the zero interest rate environment brings a much-needed re-adjustment 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. With a substantial localised presence, track record and deep bench of knowledge, Cheyne Real Estate is well placed to offer those solutions to the best-in-class counterparties in the UK and Europe”.

The sector that Cheyne has chosen to support most significantly in recent years, and in which it maintains the highest conviction, is the Living sector (including affordable homes, purpose-built student accommodation, later living and senior care). The firm also favours the onshore industrial and technology-led sectors. In the office space, the firm will only support properties with the strongest environmental credentials and a focus on employee well-being. Some of the firm’s recent deals include the structuring of a GBP780 million loan alongside JP Morgan to Quintain for the refinancing of Wembley Park; GBP318 million to Goldman Sachs-backed Riverstone for two later living developments in London, GBP229 million to Stanhope Plc for the transformation and extension of the iconic 76 Southbank in London into an exemplar low carbon office, and over €200 million to the Beaumier hotel group with lifestyle hotels across France, Switzerland and Spain.

Cheyne Real Estate made GBP2.8 billion of European loans in 2022 and is on track to exceed GBP3 billion in 2023. It has a strong track record with a zero-loss rate on its senior loan book since inception in 2009.

Stuart Fiertz, Co-Founder and President of Cheyne Capital, concluded “We believe that Cheyne is one of the few European-based real estate debt managers with a long and consistent track record and a large team with experience across all aspects necessary to be a successful real estate debt manager. This, combined with local presence via a network of offices across Europe, has enabled us to build deep and trusting relationships with our borrowers and an enormous pipeline of loans which we look forward to funding through the next iterations of the CRECH programme”.

The modification to the restructuring and repayment plan which will allow the liquidation and closure of accounts with banks and bondholders has been approved with 90% of creditors voting

The most popular hypothesis turned out to be the correct one: Gianluigi Aponte’s MSC group is the entity that will allow the Moby group to close relations with the creditors of the half billion euros borrowed seven years ago.

As anticipated by SHIPPING ITALY two days ago, in recent days Moby has called a meeting of bondholders (in first call for today 24 November and in the second on the 28th) to give them (and the creditor banks) the opportunity to express themselves on a modification of the agreements relating to the composition approved a year ago and which became executive in June (concerning Moby and the subsidiary Cin – Cmpagnia Italiana di Navigazione). In essence, the company, 51% owned by the Onorato family (and 49% owned by Aponte) has proposed to the financiers the immediate payment of the amount agreed upon in the composition with creditors (around 65% of the nominal value of the loans, with slight differences depending on the various composition positions) and the renunciation of the complex architecture envisaged for the months to come, on the basis of which the financiers, in addition to the release of further finance, would have taken part in a new vehicle (ShipCo) in which a large part of the fleet would have been registered, with the agreement to obtain the rental to a further entity (OpCo) who would have the management of the fleet and the proceeds of the future sale of some ships.

The settlement and write-off, however, provides for the immediate closure of each relationship against the payment of 315.8 million euros to creditors (divided into four categories), a payment made possible by the commitment (through a loan shareholders) of Sas Shipping Agencies Services Sàrl, the company belonging to the MSC group which last summer (SHIPPING ITALY revealed it) acquired 49% of Moby injecting 150 million euros.

It remains to be understood at this point whether the shareholder loan made available to Onorato by Aponte is in some way convertible (into shares of the blue whale) and whether (when) this will therefore bring the MSC Group (already the parent company of Grandi Navi Veloci) also to share control of Moby.

The bondholders’ vote (75% approval required) took place in the last few hours at the bondholders’ meeting scheduled for today on first call and ended with the favorable vote of all those present representing 90% of the creditors. In the draft report which had already been published in the previous hours, the various creditors are mentioned: the senior lenders Amco – Asset Management Company, Banco Bpm, Kerdos Spv (Prelios), Unicredit, Goldman Sachs, the bondholders Aptior Capital Master Fund, Rbc Global Asset Management (UK), Cheyne European Strategic Value Credit Fund, System 2 Capital.

The loan will finance the acquisition of three buildings of approximately 20,000 sqm in the centre of Madrid.

Cheyne Capital, the global alternative asset manager, has announced that it has completed a €73 million senior loan to H.I.G. Capital, a global alternative investment firm with $59 billion of capital under management. The loan will finance the acquisition of three buildings of approximately 20,000 sqm in central Madrid. The buildings will undergo extensive renovation to transform them into high quality residential projects with strong environmental credentials, this new development seeks to absorb some of the steady growth in demand for housing in the city.

Located in the established residential area of Arturo Soria, the portfolio consists of three buildings: two office buildings and a hotel, which have recently received planning approval for transformation into an institutional angle residential project of some 267 units, combining units for sale and units for rent, with a comprehensive suite of amenities including swimming pools, gymnasium, restaurant areas, cinema, sky lounge and rooftop gardens.

Daniel Schuldes and Javier Quintela, stated on behalf of Cheyne Capital Real Estate:: “We are delighted to support the conversion of outdated and obsolete buildings into more energy efficient residential housing. The properties are very well located and will have excellent amenities, so we are delighted to partner with H.I.G. Capital to deliver this revolutionary and much-needed project for Madrid. This project will provide much needed high quality housing in today’s market, helping to address the structural imbalance between supply and demand in Madrid”.

Cheyne Capital is looking to raise £7.5bn for its property lending programme, to help meet UK and European borrower demand as banks retrench from the asset class.

The global alternative investment manager is launching the next iterations of its Cheyne Real Estate Credit Holdings (CRECH) programme, with a particular focus on senior lending and recapitalisations.

Its senior loan strategy – the eighth launch in the CRECH programme – will focus on senior property loans in the UK and Western Europe and will target a capital rise of £5bn.

Its capital solutions strategy will also make senior loans, alongside other solutions across the capital stack, including subordinated debt, hybrid credit and commercial mortgage-backed securities.
Cheyne Capital said that this strategy already has a £650m investor commitment and will be the ninth launch in the CRECH programme with a hard cap of £2.5bn.

“The end of the zero interest rate environment brings a much-needed re-adjustment in asset values and the move to long-term necessary, productive assets and away from obsolete assets held up by low interest rates,” said Ravi Stickney, managing partner and chief investment officer of Cheyne Real Estate.

“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.”

CRECH made £2.8bn of loans last year and is on track to lend more than £3bn this year. It has a zero-loss rate on its senior loan book since inception in 2009.

Real estate investments account for approximately half of Cheyne Capital’s $11bn (£8.8bn) of assets under management.

Several Middle East hedge fund firms including Waha Capital and Aventicum have recorded strong performance so far in 2023, according to a report by Business Insider citing data from HSBC’s latest Hedge Weekly Report.

Dubai-based Waha Capital’s $865m MENA Equity fund, which invests in equities in the region and northern Africa, is up 14.8% to the end of October, while Aventicum, a Doha-based joint venture between Credit Suisse and Qatar’s sovereign wealth fund, has recorded a 13.9% YTD return for its MENA strategy.Cheyne Capital’s EMEA Long Short Equity fund meanwhile, which is run by Dubai-based Carl Tohme, is up 11% as of 10 November.