Deutsche Bank refinances Lifestory in £150m deal

The loan is secured by a portfolio of 21 retirement facilities in the UK.

German lender Deutsche Bank has provided a refinancing facility to Lifestory, the residential developer backed by US private equity firm Oaktree Capital, for 21 of its UK senior living properties.

The three-year amortising loan, which is understood to be in the region of £150 million (€172 million), reflects a loan-to-value ratio of around 65 percent.

In a statement, Lifestory said the loan “provides a platform for the business to operate from over the coming years as the final customers are introduced to this portfolio of thriving retirement communities”.

Lifestory was formed in 2019 through the merger of retirement living housebuilders PegasusLife and Renaissance Retirement with open-market housing specialist Anthology. The deal created a business with more than 2,500 homes across 50 UK developments.

In August of that year, manager Sculptor Real Estate – then known as Oz Management – and UK lender Lloyds Bank announced they had provided a £525 million whole loan financing to PegasusLife, which was owned by Oaktree. The proceeds were to be used to refinance and consolidate the firm’s existing borrowings and provide capital for further growth.

The loan from Deutsche Bank is understood to refinance the remaining balance of that loan ahead of maturity this year, with Lifestory having also disposed of sites in the subsequent years.

Rob Jones, principal at Moorhall Capital, the debt and equity adviser that arranged the refinancing for Lifestory, said the deal provides it with capital to actively manage its portfolio of for-sale retirement homes, at a time when it is moving its strategy towards build-to-rent senior living.

Jones told Real Estate Capital Europe Moorhall began the refinancing process in March and closed the deal in October. “We ran a targeted process and had a clear structure that we wanted to achieve. The response to the financing was positive, given the depth of data that Lifestory could provide relating to the performance of the portfolio, as well as the quality of the properties.

“As a result, the depth of interest was strong, and we were able to focus on a handful of lenders willing to underwrite the entire financing. These came from a mix of banks and debt funds. Overall, though, the appetite for the retirement living sector across all financing requirements continues to be robust.”

The portfolio contains 284 units, comprising one, two and three-bedroom homes. Three of the sites are in London – one in Westminster and two in Hampstead. The portfolio also includes large developments in Cheltenham and Bristol.

David Clark, chief financial officer at Lifestory, said the firm had previously borrowed from Deutsche Bank for a development in London’s Hoxton area, which was paid off in 2022. “They are fully aligned with Lifestory on our strategy to sell through the existing developments, as we move towards a rental strategy for new sites,” he commented.