S&W completes Chelmsley Wood Shopping Centre sale

29 January 2016 Consultancy.uk

Fordgate Midlands Properties went into administration when it could not pay the developer and project manager of the Chelmsley Wood Shopping Centre expansion. The asset’s secured creditor, the Bank of Ireland, hired Smith & Williamson to manage the administration of the centre. Management involved maximising the yield of the asset through occupancy. In 2015 the centre was sold on behalf of the bank for £30 million. Smith & Williamson collected £274,000 in fees for their administration of the asset and its sale.

Fordgate Midlands Properties, founded in 1988, is a property investment company with ownership of Chelmsley Wood Shopping Centre in the West Midlands, a shopping centre located in Chelmsley Wood. The original shopping centre was 341,034 sq. ft., with the addition of two extensions adding a further 82,286 sq. ft. in 2009. The development of the mall was partly funded by a loan from the Bank of Ireland with a value of £43 million. In 2010, following substantial sums not being paid to the developer and project manager, the bank sought advice surrounding recovery of debt due from the company. A number of strategies were devised by the company regarding ways forward which were rejected by the bank, with no further monies made available to pay the debt.

Chelmsley Wood Shopping Centre

In 2011 the company, to protect itself from unsecured creditors seeking legal action, went into administration. Smith & Williamson were called in to lead the administration of the company on behalf of the Bank of Ireland. The secured creditor’s (the bank) long term strategy for the mall was to hold onto the asset and allow it to be further developed, until the market recovered. As part of the administrative duties, Smith & Williamson were tasked with overseeing the negotiations with the mall’s tenants regarding their occupancy with the aim of maximising tenancy levels and income generated. They were tasked with bringing occupancy to the newly developed parts of the mall complex; and seeing to the general management of the asset.

It was recently announced that Chelmsley Wood Shopping Centre in the West Midlands has been sold by the administrators on behalf of the bank, in a transaction reported to be worth £30 million. Smith & Williamson were paid fees totalling £274,000 for their work administrating and sale of the asset for the Bank of Ireland. Travers Smith and Jones Lang LaSalle acted as lawyers and real estate agents respectively for the administrators.

Henry Shinners, Head of Restructuring and Recovery Services at the London office of Smith & Williamson says: “We’re delighted that this sale has completed. It has involved a lot of hard work and demonstrates the strength, as well as the breadth, of experience our team has nationwide.”


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