UK - Grosvenor, the privately-owned property group, has confirmed it is in debt talks to prevent a breach in the banking contract of its retail fund.

Fund managers of Grosvenor's £690m (€778m) shopping centre fund grew concerned about the fund's levels of debt in 2007 and began negotiations with bankers, according to Mervyn Howard, head of UK fund management for Grosvenor.

"The Grosvenor shopping centre fund is in advanced discussions with their lenders on the terms of a renewal of their bank facilities. We report quarterly to investors and at the end of the second quarter of 2007 we reported that we were concerned at the level of debt and we needed to address it."

The fund was created in 1998 to target shopping centres in medium-sized UK towns and was valued at £690m in December 2007. Its current value will not be disclosed until the 2008 financial results are published this April.

The Shopping Centre Fund's principal assets include Cooper's Square in Burton, Dolphin Centre in Poole, Eastgate Shopping Centre in Inverness and Freshney Place in Grimsby.

In addition, James Raynor has been appointed managing director for Grosvenor Fund Management in continental Europe and will be based in the firm's Paris office.

Raynor joined Grosvenor in 2004 as director of investor relations from the Royal Bank of Scotland in Paris, where he was senior director of European real estate.

Grosvenor currently owns and manages £12.9bn in property assets across Europe, Asia and the Americas.

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