The Borough Yards development on London's South Bank has been handed over to lender Cheyne Capital in a consensual restructuring after failing to secure enough tenants.

Developer Mark Capital Management, which owned and managed the retail, food and beverage, and office scheme, valued at an estimated £130M, agreed to hand it over to investment firm Cheyne Capital in July, the Financial Times reported.

The process was not triggered by foreclosure, and Cheyne Capital now manages the 194K SF development, which is underneath Victorian railway arches near Borough Market on the south side of the River Thames.

Mark bought the site in 2016 when the company operated under its previous name, Meyer Bergman. After a major redevelopment, Borough Yards opened in 2022, but leasing of the space — which includes Barrafina, Brother Marcus, chocolatier Alain Ducasse and Everyman, a 6K SF specialist cinema — was initially disrupted by the pandemic.

Problems at the site were compounded by interest rate rises, which hit asset values and led to Cheyne intervening in 2023, when it refinanced Mark for £123M. The latter then launched a sales process but was unable to secure a buyer, and Mark decided not to seek additional capital because the real estate fund that made the initial investment had reached the end of its life.

Meyer Bergman acquired the former wine complex Vinopolis when the site was put up for sale for redevelopment. Crosstree Real Estate, Thor Equities and TH Real Estate, now Nuveen, all looked at the site before Meyer Bergman's acquisition and subsequent planning consent for a £300M scheme.

The development spans restaurants, 51K SF of flexible offices operated by The Office Group, and retail near one of the capital’s most popular tourist attractions, which, conversely, has been seeking ways to calm foot traffic at peak times.

Its difficulties echo those of Coal Drops Yard at King's Cross, which has rejigged its tenant lineup since first opening after experiencing low footfall away from peak times.

“This part of Borough has been underserved in terms of a retail offering given the needs of the local community, the commuters who arrive at London Bridge and the number of visitors exploring the iconic sights in this part of London,” Meyer Bergman CEO Markus Meijer said at the time of the acquisition.