Britain’s heavily indebted property firms are suffering as real estate values have gone into free fall, losing as much as 75% in value recently, especially in the commercial sector, and Simon Halabi is no exception. Back in April it was clear that Halabi’s property company was likely to default after breaching it’s lending covenants and was required to refinance mortgages to the tune of £1.15 billion. The deadline passed last week, although we understand he has now been given another 10 days grace period.
Their loan to value ratio fell below agreed levels, and despite government assurances that the banks are “ready to lend,” it seems unlikely in this case. The tycoon’s family trust, which owns one of the largest collections of office buildings in Central London - including American bank JP Morgan’s UK headquarters at 125 London Wall, the Aviva Tower and 60 Victoria Embankment - missed a crucial financial deadline on Thursday and has been attempting to find financing. Halabi’s empire had been valued at £1.8 billion at the height of the boom, but is now valued at around £900 million – and falling.
Halabi’s problems have been compounding for some time. He recently sold his 30% stake in the “Shard of Glass,” for £30 million – £100 million less than the value 6 months previously. Ouch!
