Octopus is targeting a raise of £750m for the fourth iteration of its real estate debt fund.

The Octopus Real Estate Debt Fund IV will provide senior-secured, transitional debt, with the aim of unlocking depreciated real estate and development sites to create modern places to live and work in the UK.

The fund’s focus will be across key living sectors such as student housing, co-living, build-to-rent, build-to-sell, retirement living and care homes. There will also be an allocation to offices, industrial and retail.

Read more: Barings grows US real estate business with Artemis acquisition

Octopus noted that the UK has a shortfall of more than four million homes, with over a million houses on affordable waiting lists at present. The fund aims to support new housebuilding by backing best-in-class developers and delivering buildings that meet modern environmental targets.

The lending team and fund will be led by Ludo Mackenzie and Andy Scott, co-heads of real estate debt at Octopus.

“We are committed to helping developers and investors unlock real estate value,” said Mackenzie.

“With our focus on refurbishment, repositioning and redevelopment, we can transform underused or neglected spaces into vibrant and thriving places, creating jobs, boosting local economies, and providing much-needed homes.

“This is productive finance at its core; lending against depreciated properties and brownfield land, enhancing the built environment and generating good risk adjusted returns.”

Read more: KKR closes opportunistic real estate credit strategy with $850m

Scott added that as a non-bank lender, Octopus can be flexible and efficient in its approach, providing reliable funding throughout the UK.

Since 2013, Octopus has lent more than £4.3bn into its real estate debt strategy, which includes lending from its three previous commercial real estate debt fund vintages.

“Building on the strong track record of our previous debt funds, the Octopus Real Estate Debt Fund is focused on delivering value for all partners,” said Ed Clough, managing director of Octopus Real Estate.

“For investors, that means providing access to the real estate sector through the buffer of senior secured real estate loans. For developers, we are addressing the funding gap by providing tailored, flexible bridge and development funding solutions for transitional real estate. And for communities, we are unlocking old and unproductive real estate assets to provide modern, energy efficient places for people to live and work.”

Read more: Octopus expands into private debt