Lloyds starts £100 million property sale

Published on Wednesday 8 September 2010 18:28

UP TO £100 million worth of luxury rental properties bought by HBOS-backed development firm Heritor's during the boom years have been put up for sale as Lloyds Banking Group accelerates its disposal of property assets inherited from Bank of Scotland.

The high-profile portfolio contains 300 properties in some of Scotland's most sought-after addresses including Edinburgh's prestigious India Street.

The properties have been in the hands of administrators at PricewaterhouseCoopers since Heritor's fell into administration early last year. It is one of the many Scottish property firms supported by Bank of Scotland before its takeover by Lloyds.

Heritor's was known for operating at the top end of the market, buying up elegant apartments in roads such as Abercromby Place in Edinburgh's New Town.

Its founder Chris Buchan and his business partner, estate agent David Alexander, lost their savings when the Heritor's group of companies went under.

Scotland on Sunday has learned that Lloyds is also reviewing two further high-profile portfolios, owned by Edinburgh-based Grant Management, as the bank works through the raft of interests inherited from HBOS's feverish lending to the property sector.

It is believed that the fate of more than 700 properties in Dundee, Edinburgh, Glasgow, Stirling and Manchester is under consideration and a commercial property consultancy has been lined up to advise on the portfolios.

Sources close to the situation say they contain flats mainly let to students and could be put up for sale or acquired by Lloyds itself.

A spokesman for Lloyds Banking Group last night refused to comment. Peter Grant, chief executive of Grant Management, said he knew of no plans to sell the properties on the open market "at the moment", adding: "They are trading as normal."

It is understood that those responsible for processing property interests at Lloyds are keen to deal with assets and holdings now while residential prices are favourable.

One source said: "Residential prices are static but static might be looking really good in six months."

The news comes just days after the revelation that Lloyds has struck a deal to sell its interests in housebuilder Crest Nicholson to US investment fund Varde.

Following the HBOS takeover, Lloyds was left with about a third of Crest's equity and a quarter of its debt.

The bank has refused to disclose a sale price for its interests in the firm, which was once a joint venture between Scottish entrepreneur Sir Tom Hunter and HBOS.

Last week it was also revealed that Lloyds has put a prime development site in one of Glasgow's most important conservation areas on the market.

It is searching for a buyer for 110 Queen Street, which Australian firm Valad had planned to transform into a 40m mixed-use office and retail development prior to the recession.