Commercial Finance Specialists

Lloyds Banking Group may ask property investment firms involved with a beleaguered commercial development to provide more funds.

Property investment firms may be asked to inject more cash into a troubled commercial development project in Glasgow.

Tritax Eurocentral EZ Unit Trust has breached the loan-to-value covenant on a £193.55 million commercial mortgage provided by Lloyds banking group, according to Property Week.

The loan was taken in 2007 at a loan-to-value of 59 per cent, but the property market slump and poor lettings at the largely-empty site have led to the breach, with Lloyds bringing in property consultant King Sturge to review the situation.

Property Week reports that Lloyds may ask the stakeholder property investment firms to provide more funds.

David Hunter, chairman of TAL CPT Land Development, development manager of the scheme, told the publication: "As far as we are concerned, we have a spectacular piece of real estate that has come to the market at a difficult time.

"We have full confidence in the asset that offers value and will fill up over time."

BNP Paribas recently claimed that it could take 15 years for commercial property values to get back to their pre-recession levels.

Posted by Tess Nelson.