BHS administrators Duff & Phelps have salvaged just £12m for creditors through property asset realisations from its £200m portfolio.
Estates Gazette reported in August that administrators were expected to have raised at least £22m from landlords surrendering their leases.
However, in its most recent creditors report, seen by Estates Gazette and due to be released next week, Duff & Phelps lists just £12m of property asset sales between 25 April and 24 October 2016. The majority of that comes from Hermes, which paid £10m for the long leasehold of BHS in Milton Keynes.
In the same time the administrators have pocketed £3.4m in fees, while agents including Savills, CBRE, Gerald Eve and Allsop have been paid £198,641 collectively.
The administrators point to Brexit and the uncertainty surrounding the administration as causes for delayed transactions and dropped deals.
Hermes was negotiating for the Milton Keynes lease before Duff & Phelps were appointed, and its original offer was reduced substantially as a result of the administration uncertainty. Duff & Phelps was forced to accept a lower level, according to the report.
>>> Read more news, analysis and expert commentary on the BHS collapse here
A number of other landlords expressed an interest in paying a premium if the company agreed to a lease surrender enabling them to relet or redevelop the properties.
The initial sale process produced a high level of interest in securing premiums. However, following the announcement of the orderly wind-down and the Brexit referendum, administrators said that “levels of interest reduced significantly”.
But more money still needs to come from somewhere as BHS’s 7,500 creditors are owed an estimated £1.3bn.
Property issues remain and there are complex inter-company debts to be resolved. Duff & Phelps’ report warns that it may need to wait until the company has gone into liquidation before it can resolve any remaining outstanding property balances.
Carmen Properties, a Jersey- based property company set up by Sir Philip Green that held various leasehold interests in the company, needs to pay £4.8m. The administrators state that it is “uncertain” whether Carmen Properties will be able to pay until it has generated more liquidity through separate property sales.
BHS Group owes £48.8m. The administrators say that it is “currently unknown if there will be funds available” and that any remittance will be “dependent upon future realisations from any successful antecedent transaction claim.”
BHS timeline
- March 2015 Sir Philip Green sells BHS for £1 to Retail Acquisitions, led by former bankrupt Dominic Chappell
- March 2016 Creditors back a CVA, which landlords vote for
- April 2016 BHS sells Oxford Street flagship for £55m
- April 2016 BHS collapses into administration, sparking an investigation by MPs into Green and Chappell
- April 2016 BHS pension deficit valued at £571m
- May 2016 The Pension Protection Fund, the largest unsecured creditor in BHS, estimates its liability at £275m and urges administrators to line up liquidators
- June 2016 Administrators confirm they have been unable to find a buyer and decide to wind the company down
• To send feedback, email amber.rolt@estatesgazette.com or tweet @amberrolt or @estatesgazette
