Complex Lending Arrangements Case Study - UK retail and commercial bank

Challenge

Complex portfolio comprising mix of offices and high street banking branches

No exclusive tenant, some buildings fully let, others part-vacant or with third party tenants

Very complex lending arrangement owing to residual management liability for both parties

Required delicate negotiation with the principle occupier

How we helped

• Over six years, we deployed a strategy to manage the portfolio and exploit active management potential across numerous properties, before selling assets in regional lots
• Drew upon expertise from across Vail Williams as well as expert consultants nationwide to deliver best-in-class advice
• Renegotiated the break pool agreement across the portfolio on all leases to RBS / NatWest
• Renegotiated the separation works agreement with RBS / Nat West to ensure the buildings were fully self-contained
• Undertook rent reviews across the portfolio
• Explored value add opportunities, including obtaining planning consent for residential conversion of upper parts of various buildings
• Separated out, supervised the construction of and sold subsequent flats, selling over 24 in London alone at aggregate values in excess of original appraisals
• Explored reletting of vacant space for commercial and other uses, increasing the rent roll by £2m pa
• Disposed of various properties to special purchasers at premium prices

Results

• Delivered a best-in-class strategic solution for the client
• Realised twice what was offered for the portfolio at the outset, over the course of the Receivership
• Navigated the complexities of the project, drawing on skills and services / consultants to maximise the value of the assets
• Achieved gross sale receipts across the portfolio close to the original loan, with most valuable single asset on Kensington High Street London selling for £19m at a 25% premium to valuation.