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£50Bn Commercial Property Loans Breached / Defaulted

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This story is on the news blog, but appeared to to be a biggy imo, so I posted to the forum as I could not see it here.

If already on here, my apologies & mods please merge.


"De Montfort research shows total lending continues to rise to £250bn.

A fifth of all UK real estate debt is in default or in breach of its terms as the banking industry seeks to overcome its profligate lending past.

De Montfort University’s annual bank lending report, which is published exclusively this week in Property Week, reveals that £50bn of the UK’s total outstanding £250bn of property debt consists of problem loans.

It says that £28.3bn of loans are in breach of their financial covenants, which is almost three times the £10.7bn of breached loans in 2008. There are also £22bn of loans — at least 6,537 loans in total — that defaulted last year, a massive increase from the £3bn of loans that defaulted in 2008.

The definitive report on UK real estate lending, compiled by Bill Maxted and Trudi Porter, also shows that, in addition to the problem loans, there is a fast-approaching “funding gap”.

It says £161bn of debt and £17bn of commercial mortgage-backed securities (CMBS) debt is due for repayment in the next five years — but that lending institutions have yet to address how to refinance this backlog.

In 2010 alone, there is £52.6bn of balance sheet debt, which is up from £32.6bn because loans that should have been repaid in 2008 and 2009 have rolled over into 2010. An additional £2.4bn of CMBS debt is due to mature in 2010.

Another £29bn of loans that expire in 2009 have been extended into later years. There is now a total of £67.1bn of debt that will mature in 2011 and 2012.

However, last year there were only £15.1bn of new loans, and just four organisations account for 45% of that total. This is a decrease of nearly 70% on the £49.2bn of loan origination in 2008. Of the 59 lending institutions surveyed, 36% said they had no loan originations whatsoever last year.

“With an estimated £55bn of loans due to mature during 2010 and only £15.1bn of loans originated in 2009, the magnitude of the potential funding gap that exists in the market is clear,” the report says.

Despite the sharp spike in problem loans, the report says there is more optimism in the general banking sector. Those banks that are lending are also doing so on more profitable terms and competition is increasing, which will improve conditions for borrowers.

Read more: http://www.propertyweek.com/story.asp?storycode=3163757&origin=PWweekly#ixzz0okmz2gNR


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8 years ago someone built this .... still empty never used OO.


The terrible architecture hangs around long after the default, built like stage sets with minimum quality and just enough

architecture to scrape past the planning department on their second appeal.

Something like this and the above could be a shopping center or a school or residential housing they all look the same.


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