Knowles phlegmatic over ProInvest demise
LANCASHIRE property entrepreneur Tim Knowles insisted it was “business as usual” at his property empire following last week’s news that an investment vehicle containing more than 20 properties known as ProInvest LLP had been placed into administration.
Mr Knowles said that ProInvest represented a “minor part” of his overall property portfolio of more than 8 million sq ft.
He also said that although the properties had been managed by his overall property management company, First Investments Ltd, they were not owned by the company, which remains unaffected by ProInvest’s collapse.
He said that the administration resulted from a drawn-out refinancing process of commercial mortgage-backed securities worth more than £240m.
It had initially borrowed £71m from Credit Suisse, which was converted into securities, and later agreed a recovery plan with debt servicer Capita at the end of last year.
However, Capita was then replaced as the special servicer by Hudson Associates, and despite a new deal being proposed, which involved Mr Knowles injecting an extra £3m into Proinvest, Hudson failed to agree terms and appointed LPA receivers to ProInvest in April.
Mr Knowles told TheBusinessDesk.com that First Investments eventually restructured £240m worth of its own debt with Deutsche Bank, the principal lender and other sub-lenders, in May. The deal extends the life of the loan on another portfolio until after 2016.
“This means that portfolio can now benefit from long-term well-structured financing to post 2016 and is of great advantage to the noteholders concerned,” he said.
“This is most probably the largest successful extension of this type of loan and everybody should take their lead from this. It is 100% the right thing to do.
“The UK property market is witnessing a lot of property owners and companies restructuring debt to work property portfolios through recession and its aftermath.
“Otherwise the market would be awash with ‘fire sales’ and values would plummet still further. It is the most logical and constructive way to progress as long as the incumbent owner has additional equity and is an effective manager.”
Mr Knowles said he had been the biggest loser in the collapse of ProInvest, as he had invested £17m of his own equity into the venture. He hopes to recoup some of this through the asset sales being arranged by the LPA receivers.
“Frankly, it is a case of ‘you win some, you lose some’ and this isn’t going to stop our momentum. We have some great news in the making this year so we really would prefer to concentrate on that.”
He added that his 200-strong management company, First Investments, retained “very strong backing” from a number of equity investors and planned to build a large, multi-let industrial portfolio of between 25 million-30 million sq ft over the next three-to-five years.
He said the portfolio would be “the first truly nationally branded supply of multi-let estates in the UK”.
