NORTH East property firm Grainger has won a deal to manage a portfolio of distressed buy-to-let loans from Lloyds Bank with the potential of further similar deals to follow.
The Newcastle-based property company is to manage the bank’s newly created Residential Asset Management Platform (RAMP), which will look after houses and apartments after their owners have started insolvency proceedings.
Grainger, the UK’s biggest residential landlord with 20,000 properties under its management, has been discussing the link-up with Lloyds for a couple of months.
The bank would be out of pocket if it tried to sell on properties bought at the height of the market.
But the improvements organised by Grainger will help increase sale or rental values. It will get fees for rent, disposals and shared success fees.
Dave Butler, Grainger’s director of corporate affairs, said: “Lloyds have a number of portfolios that have problems with them, mainly buy-to-let portfolios.
“To ensure the bank, owners and the Government get the best deal, they have asked us to help manage the portfolios.
“Historically, the banks have for a very long time been trying to work out what liabilities there are, work out what they have and find teams to manage the issues. It’s a very difficult issue for some of the banks.”
Grainger will look at medium to large property portfolios owned by companies or individuals, in the main properties that have been bought as buy-to-let. The first portfolio it is looking at has around 800 houses and Grainger will work to maximise rentals and ultimately sell the properties.
“For us, it is a lengthy process to look at each portfolio,” said Mr Butler.
“It builds on our expertise in managing portfolios.”
Lloyds, which is around 40% owned by the taxpayer, is responsible for an estimated £500m worth of residential property owned by commercial firms. This deal is part of Grainger’s strategy of increasing revenues from its existing resource base.
Executive property director Nick Jopling said: “The transaction will deliver to Grainger a recurring income stream with the potential for further upside without the need to commit any group equity or debt.”
Grainger took on the 317-strong HI Tricomm portfolio of Ministry of Defence housing, as well as full ownership of the GenInvest Partnerships joint venture.
