News about MIH/PPG's Commercial Property

[kevinthomson8 0]

http://thescotsman.scotsman.com/business/David-Murray39s-property-arm-sells.5965705.jp

[rbr 1,247]

I posted about this ages ago , this property was fully let and with 5 year leases , yet has been sold at over �£20 million less than had been anticipated , dont let the figure quoted fool you , this was a pressurized sale .

 

The source of this was a friend who has been in the commercial property valuation game for over 25 years , and this was known well before October

[Frankie 8,182]

We won't know anything concrete about MIH's position until the Spring where upon their delayed accounts are released...

 

I'm sure I read somewhere commercial property prices have risen slightly in recent months so that should help them somewhat.

[rbr 1,247]

We won't know anything concrete about MIH's position until the Spring where upon their delayed accounts are released...

 

I'm sure I read somewhere commercial property prices have risen slightly in recent months so that should help them somewhat.

 

Which is all the more surprising that he sold his premier development fully let for millions less than it's worth , but the bank have no bearing on this decision , now where have I heard that before

[Frankie 8,182]

Like has happened at Rangers, Lloyds may have been happy with a restructuring of the MIH debts which explains the sale of at least one high profile property in the PPG portfolio.

[Zappa 0]

It's not even necessarily the case that the bank will take all the money from the sale. Other ongoing developments need financing & it's possible that the bank are just trying to reduce overdraft facilities which in turn would force the sale of such a valuable asset for the sake of continued development on other projects.

[calscot 0]

It seems to me that the majority of money will go towards much needed cash flow - the lack of which is what generally kills businesses. MIH needs to limp it's way through the recession without going under and when the economy picks up it will be in a far less dire position. From what people have said, the biggest problem seems to have been financing the property market with short term loans which then had the bottom kicked out of it.

 

That left MIH with massive negative equity while being strapped for cash to keep operations going. If they can trade their way through this period while selling a big property or two, they should be able to gain on the next rise in property prices.

 

That's my layman's understanding anyway.

[Bluedell 5,354]

It is prime property, and would be a loss to the PPG portfolio. It is possibly one of the more readily sellable properties that they have, which may be the reason that it was picked.

 

There must have been some restructuring of the MIH debt or there would be a lot more property requiring to be sold, but presumably Lloyds insisted on some level of repayment.

 

Zappa, you need to remember that MIH were due to repay loans of �£400m last year with no apparent cash to do so, so the likelihood is that the bank did take all of the cash.