A property investor has breached the terms of a £145m loan because its lender found that its four British shopping centres were worth less than had been thought.
RDI REIT, which owns offices and hotels as well as retail parks, said yesterday that it had breached a covenant of a debt facility covering the shopping centres that it has with Aviva, the insurer and asset manager.
Aviva carried out a valuation of the sites and found that they were worth £152.5m, giving it a loan-to-value of 89.4% that exceeded the 85% ratio stipulated in the covenant.
The four shopping centres are: Grand Arcade in Wigan; Weston Favell in Northampton; Birchwood in Warrington; and Byron Place in Seaham.
Under the terms of the facility agreement the borrowing entities have until 23 April to cure the covenant breach, which would require a cash injection of roughly £9.4m (added to the restricted cash currently in the facility) or the addition of new collateral to reduce LTV to below 85%.
The four shopping centres secured by the Aviva facility represented around 12% of RDI’s overall portfolio by value at 31 August 2018.
