Lloyds, Green Property agree Irish workout contract

Dublin-based firm Green Property could manage up to EUR 1 bn of Irish commercial property assets under a new agreement with Lloyds Banking Group.

Under the contract Green Property will offer asset management services to receivers appointed by Lloyds to assets that form part of its EUR 13 bn Irish real estate loan book. It will be up to the appointed receivers to decide whether or not to use Green's services.

It is estimated that Green Property could be mandated to manage as much as EUR 1 bn of office, retail and industrial assets. The exact number, composition and size of the assets under management will depend on which receivers decide to make use of Green's services.

Lloyds stressed that the aim would be to actively manage properties to 'preserve and enhance value' rather than to hold fire sales.

The loan book - much of which is under water - was originated in both Northern Ireland and the Republic of Ireland by Bank of Scotland (Ireland). Lloyds is the parent company and it closed the Irish subsidiary in 2010. Bank of Scotland (Ireland) is being run down by Certus, a which is led by the former management.

Lloyds said that Certus works with borrowers wherever possible and receivership is the last resort. 'Receivers appointed over assets that are part of Lloyds Banking Group's Irish loan exposure that choose to engage with Green will benefit from the strong expertise of the company and consistency of management and reporting,' the bank said.

Andrew Wilson, head of Solutions Corporate Real Estate Business Support Unit at Lloyds, said, 'The challenges facing the Irish commercial real estate market are significant and will require a medium to long-term property-led solution. The creation of this framework, with the benefit of Green's management expertise in the Irish market, will serve to meet these challenges'.

Green is a property development and investment company focusing on the retail, industrial and office sectors in Ireland and the UK. The company was listed up to 2002, when it was taken private by UK real estate professional Stephen Vernon.