WCC and Lloyds look to offload joint £150m portfolio

SIR Tom Hunter's West Coast Capital and Lloyds Banking Group are on the cusp of selling a £150 million portfolio of retail properties to Legal & General, it has emerged.

Sources say negotiations over the properties, which are held by a fund called LxB3, are at an advanced stage.

The sell-off would mark the latest move by Lloyds to reduce its exposure to both the commercial and residential property sectors after it inherited a raft of risky assets from Bank of Scotland last year.

Lloyds and West Coast Capital each hold a stake of about 40 per cent in LxB3 which was originally created with Icelandic retail group Baugar in 2005.

Sir Tom Hunter swooped on Baugar's stake four years later when the Icelandic economy imploded, leaving many of its firms and investment vehicles fighting for cash.

The fund holds a range of assets including food and department stores. Among its flagship properties is the Royal Spa retail park in Tunbridge Wells in Kent.If the deal goes ahead as expected, the sale price is expected to reflect a yield of 5.75 per cent.

Both Lloyds and West Coast Capital did not comment, but a source said: "There is definitely an appetite to get rid of that portfolio."

News of the LxB3 sell-off comes days after it emerged that the owners of the Maxim business park, a 330m, largely empty office development situated alongside the M8, are locked in negotiations with Lloyds after breaching its banking covenants.