Sapphire commercial retail fund falls into administration

Three shopping centres owned by the Reuben brothers and Lloyds Banking Group have fallen into administration.

The Sapphire Retail Fund met its fate after the joint owners - who each owned 50 per cent of the fund - failed to agree to a necessary refinancing of the debt used to acquire the portfolio.

The portfolio included the Harvey Centre in Harlow, Essex; the Queen’s Arcade in Cardiff; and Charter Walker in Burnley, Lancashire. At the peak of the market, the centres were tipped to be valued at more than £300 million, but experts say their value could now have fallen by as much as half.

Grant Thornton has been appointed as administrator by the syndicate of banks that provided the debt – giving weight to recent reports that Lloyds is taking a firmer stance on its remaining equity and debt stakes in property.

Malcolm Shierson, partner at Grant Thornton and one of the administrators, said, “All three shopping centres will continue to trade normally.

"Although each has generally traded satisfactorily in relation to regional and national trends, valuations for shopping centres generally remain under pressure and Sapphire is no exception to this," he added.

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