Lloyds Banking Group has assembled a panel of agents to help it to reduce its massive distressed property loan book.
It has hired 10 agents to provide valuation and brokerage advice on its £19.6bn distressed property loan book.
The appointments are being cited as the latest evidence that banks may soon start to bring large portfolios of properties now in their control to market.
Agents chosen by Lloyds include Drivers Jonas Deloitte, CB Richard Ellis, Jones Lang LaSalle, GVA Grimley, DTZ, Savills, Cushman & Wakefield, Colliers International, King Sturge, Ryden and Lambert Smith Hampton.
Lloyds has been working on creating the panel since April. The search has been run by the bank’s corporate real estate business support team, led by former Land Securities chief operating officer Mark Collins and former PricewaterhouseCoopers partner Paul Harries.
A source close to the process said: “This is a major step towards trimming the bank’s distressed property. The contract has been a long time coming, but now agents on the panel will be expecting the business support unit to begin earmarking problem properties, before cherrypicking advisers on a call-off basis to value and sell the assets.”
Lloyds – which earlier this month announced a £1.6bn profit for the six months ended 30 June, compared with a £4bn loss for the same period a year earlier – has more than £27bn of property loans, 71% of which are classed as impaired, that are currently being managed by its business support team.
So far, the bank has managed to reduce its total property loan book from £83.8bn to £80.5bn through asset sales and other actions taken by the business support team.
The bank said that, in 2008, it held £47bn of these loans on its balance sheet and that this had been reduced to £35bn this year. It hopes to see this reduced to £20bn by 2014.
james.buckley@estatesgazette.com
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