The facts
Client: PriceWaterhouseCoopers
and Royal Bank of Scotland
Location: Manchester
Services: Project Leadership,
Occupier Consultancy, Lease Consultancy, Building Surveying,
Industrial Acquisition, Property Management Accounts, Facilities
Management, Statutory Compliance Consultancy
Sector: Office
Contract Type: Strategic
Corporate Consultancy
Start/Completion: 2009 - 2010
The project
- 450 properties considered
- England, Wales, Scotland, Isle of Man, Channel Islands
- 130 taken into direct management
- £16m per annum rent roll
A challenge of complexity and risk
- A 2005 sale and leaseback disposal of 450
properties turned sour in mid-2009 after four years of limited
management. The portfolio’s instability exposed all parties
to risks.
- Leasehold properties were disposed of by way
of a Virtual Assignment. In many circumstances, Privity of
Contract applied to RBSG as original leaseholder.
- Freehold properties were purchased with a
mortgage
- Some properties had positive value, some were
negative. In either case, the legal ownership was not clear
between the mortgagees, liquidators, and RBSG.
- A complex and intricate structure of managing
agents, LPA Receivers and lenders required discretion, commercial
awareness and a flexible imaginative approach.
A strategy of three
phases
- In 2009 – 2010 NB Real Estate (now Capita
Symonds) advised RBS as original vendor, PWC as provisional
and formal liquidator, and worked with Speechly Bircham LLP as
solicitors for RBS and with two LPA Receivers.
- “Controlling the Fall” -
initially, NB Real Estate deployed emergency funding to “buy” time
for re-structure discussions between the mortgagees and
purchasers.
- “Catching The Knife” – once
the risks and layers of ownership were understood in outline, NB
Real Estate assumed direct management control of 130
properties. Within 90 days, NB Real Estate had completed
c.500 inspections, obtained statutory compliance for 130 buildings,
had mostly completed due diligence, and was embedded in the
financial, legal and practical unwinding of the interests.
- “Stabilisation”
simultaneously, NB Real Estate mobilised and project-managed a team
of up to 140 people across 13 professional disciplines from five
firms to stabilise the portfolio and reduce their clients’ exposure
to risk and liability.
A solution
By September 2010, NB Real Estate had managed the return of many
of the 130 properties to 'Business as Usual' having controlled the
risks, and limited RBSG’s and PWC’s liabilities. Most of the
other properties were allocated to correct ownership and
control. From disposal to today, RBSG has saved c.£10m from
Project Liberty.
This project mobilised in 90 days a
full service level management team across 5 firms. Over 120
people were involved across 12 professional disciplines. This
was achieved against the background of a complex
liquidation.