Mailbox owner breaches covenant on £109m loan

The owner of the Mailbox has breached the terms of a £108.5m loan after a revaluation of the landmark Birmingham site slashed its value by more than £30m.

Mailbox REIT is now in talks with its lender, Deutsche Bank, after its loan-to-value (LTV) ratio soared to 69.1% – well above the agreed covenant of 60%.

WSP’s offices in the Mailbox

It blamed “the outward yield shift for regional office assets in the current market largely due to the prevailing interest rate turbulence”.

The year-end valuation, by Avison Young, reduced the property’s value down from £189.7m to £157m. The Deutsche Bank loan had an LTV ratio of 57.2% on the previous valuation.

In a statement, Mailbox said: “The company will provide a further update to shareholders in due course and expects to be able to announce a resolution to this issue in the near future.”

The company said the site “continues to perform well”, with 95% of its floor space occupied.

The Mailbox generates £11m-a-year in rent and it said collections were “strong”. It has received 99% due for 2022, and 95% of first-quarter rents.

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