UK’s largest property tycoon, Simon Halabi, has defaulted on his debt as the value of one of his portfolios declined more than 50% ; triggering a breach in the loan-to-value-covenant in the credit agreement of his co.’s billion-plus debt pile.
From Bloomberg: ..Halabi’s real estate companies defaulted on 1.15 billion pounds ($1.9 billion) of bonds backed by nine London office buildings as the recession cut the value of the properties by about 50 percent.
The buildings were valued at 929 million pounds as of June 8, down from 1.83 billion pounds in October 2006, Hatfield Philips said. Halabi’s companies borrowed against the buildings in 2006. The debt, which was packaged into bonds, expires in October.
CRE values in the U.K. deteriorated the most on record in 2008 and have plummeted more than 40% since the market’s peak in mid-2007, according to CB Richard Ellis Group, the world’s largest commercial property broker.