Strawberry Star secures GBP75m funding from Cheyne Capital for Luton development
Strawberry Star, a London-based international house builder, has secured GBP75 million in funding from Cheyne Capital, for its mixed-use development Lu2on, which is on track for completion by the end of 2021.
Lu2on is located in one of London’s top commuter towns, owing to its connectivity and value for money. The 6.8 acre site was formally part of the Vauxhall Motors factory where some of Britain’s most iconic and best-loved cars were built. Once complete, the development will bring forward 877 residential units, including studios, one and two-bedroom apartments, and first-class facilities such as private roof gardens and 24-hour concierge.
Santhosh Gowda, Chairman, Strawberry Star Group, says: “Lu2on by Strawberry Star is the first mixed-use development in Luton, providing attractive, high-quality homes as well as retail and commercial facilities. The development is supporting the regeneration of the area and contributing to the economic growth of the town. We are working closely with the local community and the Council, to support inclusive growth. We are delighted about our new partnership with Cheyne Capital, and it signifies confidence in us both as a developer and our vision for the scheme.
Richard Howe of Cheyne Capital, says: “At Cheyne, we capitalise on opportunities in direct real estate lending; the investment approach combines a comprehensive valuation of the property assets with a detailed analysis of the debt structure in order to identify investments offering attractive yields and robust downside protection. By transacting on this debt recapitalisation we have further demonstrated our ability to source and provide innovative financial solutions in an ever changing and challenging market. We were impressed with Strawberry Star’s track record as a developer in the UK property market and are delighted to support them in bringing to market this fantastic mixed-use development to Luton.”
The funding will finance the construction of Phase 1 of Lu2on, comprising 401 units. Lu2on has generated interest among buyers, with 60 per cent of the residential units under Phase 1 already sold. Lu2on has won two awards – Best Mixed Use Development in the UK with a 5-star rating at the International Property Awards 2019 and the Best Offplan Development Award at the First Time Buyers Readers Award 2019. The average house price in Luton is GBP261,124 making it one of the most affordable commuter towns for London, with house price growth of 13 per cent since 2016 – which is almost 3 per cent greater than London, where houses prices have increased by only 5 per cent in the same time. Investors will also be encouraged by yields of approximately 5 per cent in the buy to let market.
The area also benefits from the Luton Airport Enterprise consisting over 395 acres of land. The total number of jobs created by the Enterprise Zone is expected to exceed 10,000, adding further housing demand in the city.
With off-plan sales soaring, Lu2on’s future community is beginning to take shape with phase one of Lu2on expected to be complete by Q4 2021.