Special servicing case study

Mapeley II Loan: Mapeley ‘Beta’

Loan to value turnaround in less than three years for Mapeley Beta

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The property

Mapeley Beta portfolio comprising 16 office schemes around the UK at 1.18m ft² with 27 tenants.
Largest occupier, Microsoft, occupies 246,000 ft² at Thames Valley Business Park, Reading.

The loan

Mapeley II starting loan to value ratio of the original loan: 75 per cent.
Original loan: £280m.
Valuation: £278m.
August 2012 valuation: £134.3m breaching its 90 per cent LTV trigger and representing a LTV of 141 per cent.

The problem

No asset and property management strategy.
Spiralling rent and service charges and longstanding arrears.
Unsettled tenants.

The solution

Urgent issues affecting cash flow dealt with as a priority stabilising the situation.
Rigorous appraisal of each asset to create a viable asset and property management strategy.
Consultation with tenants to secure them.
Investment in capital expenditure work to modernise and improve properties towards letting voids.
Invigorated marketing campaign.

The effect

In early 2015, valuation: £191.4m and for a complete portfolio sale: £200m.
LTV: 94 per cent.