Pension Fund Buys Out Portfolio of Failed Property Developer

Lucas Gilmore, “Big 4″ observer
January 16, 2011 /

Accounting and business advisory firm Deloitte has closed a deal with Teachers Insurance and Anuity Association – College Retirement Equities Fund (TIAA-CREF) to buy portfolio of property developer Targetfollow Property Holdings which went into administration October 2010 after it lost court proceedings to Lloyds Banking Group in a case regarding its expired loans.

TIAA-CREF buys out of administration the “Can of Ham” at Center Point in London, a bizarre 90-meter tower put up by Foggo Associates which is still under development. The tower is one of the Central London properties of the property developer placed by administrators Deloitte on sale to recover outstanding debts for Lloyds estimated at around £700 million.

The tower is believed to have been bought at £20 million by TIAA-CREF, a financial services firm in the USA investing on behalf of about 3.6 million teachers and doctors with assets worth $398 billion. TIAA-CREF is likely to takeover control of the property development since the “Cam of Ham” will add up to the sites it owns at the 60 St Mary Axe.

Deloitte has already sold properties of Targetfollow at Birmingham, Stockport, Norwich and London.

Deloitte has also come to an agreement with Almacantar in December 2010 that bought the Grade-II listed Centrepoint in the west end of London for over £120 million. The business firm is still in talks with other buyers for the rest of the property developer’s sites to raise money for Lloyds.

The property developer was placed in administration in October 2010 when its loans worth £223 million expired in July 2010 and another £453 million expired in October 17, amounts which the property developer could not pay since the value of its properties declined following the economic crisis, thus were worth less than the outstanding debt. Lloyds valued the properties at £450 million only.

Prior to its administration, the property developer’s owner Ardeshir Naghshineh said he had closed a deal with a consortium that promised to inject financial aid of £150 million, but Lloyds declined his proposal, he said.

The court favored to put the property developer to administration, saying there were “no substantial grounds for the opposition to the appointment of administrators.”


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