A portfolio of secondary office properties owned by Mapeley which has fallen by 70% in value in seven years has been put into receivership.
Hatfield Philips, the special servicers to the securitised debt that was borrowed against the properties, has appointed Robert Baldwin and Jemma McAndrew from Jones Lang LaSalle as receivers on 18 properties across the UK.
A statement from the special servicer added that in conjunction with the receiver, it will appoint Cordatus Real Estate as Mapeley Asset Manager to improve the value of the assets with a view to disposing of them before the loan matures in July 2015.
The appointment comes after Mapeley this month informed Hatfield Philips that it would not inject any equity into the loan, which went into default in October last year, which meant that the special servicer accelerated loan enforcement on 5 July.
In January this year the value the schemes had fallen to £74.7m against debt of £170m putting them almost £100m under water.
The original valuation of the properties was £244.8m carried out by CBRE and Knight Frank in 2004 and 2005.
The main driver of the plummeting value was related to the sole tenant at Delta Point, a 250,000 sq ft property in Croydon leaving the building – which was the portfolio’s original highest-valued property.
Delta Point’s value at origination was £58.6m and had fallen 83% to £10.2m according to a stock exchange announcement in February.
The portfolio is also understood to include Edinburgh’s 130,925 sq ft Chesser House which has fallen by 77.5%, from £28.45m to £6.4m; Hercules House in London’s Waterloo has fallen by 49%, from £24.35m to £12.4m; Reading’s Kings House has fallen by 56%, from £17.2m to £7.5, and Peterborough’s Touthill Close has fallen by 89%, from £14m to £1.6m.
Hatfield Philips said another large contributing factor to the portfolio’s plummeting value is the reduced average remaining lease term in four properties where tenants were unwilling to renew their expiring lease contracts.
The four properties’ value at origination was £84m and it is now 68% lower at £27.9m.
In March, Hatfield Philips said it was “reviewing, with its valuer negligence counsel, the basis for potential valuer negligence, with regard to the origination valuation”.
Mapeley delisted from the London Stock Exchange in 2009 and is now owned by Fortress Investment Group.
It was established in 1999 to bid for the contract to provide outsourced management to the Revenue and Customs estate. It won the bid in 2001 and went on to win other large outsourcing contracts for Abbey – which is now part of Santander – and for the Identity and Passport Service.
Bridget.o’connell@estatesgazette.com
