Propinvest today criticised the decision to put a portfolio it manages, which has an outstanding £950m loan, into administration.

As revealed by Property Week, the Gemini portfolio of 35 assets is heading for administration after CBRE, which manages the debt secured against it, applied for court permission to appoint partners from Deloitte as administrators.

The assets were last valued at £437m, having been valued at £1.2bn in 2006.

Today Propinvest criticised CBRE for the decision to enforce on the loan, saying that it was not under immediate stress. CBRE said in a statement yesterday that it had taken the decision because there was unpaid VAT owed to HMRC, which meant there was a risk HMRC would wind the portfolio up and take control of it.

But Propinvest said this was not a risk, and that the investors that bought into the loan had not been given a proper chance to asses a restructuring proposal put forward by the company, KKR and Westbrook.

A spokeswoman for Propinvest said: “We are both surprised and disappointed with CBRE’s decision, particularly as it was taken before bondholders had been given the chance to consider the very credible alternatives at the meeting that was due to take place on 5 September, and that it has resulted in the irretrievable loss of the £80 million of value that KKR/Westbrook placed on the maintenance of the existing corporate structure and the preservation of the swap. 

“In contrast, CBRE’s deal with Barclays - which was not necessary as CBRE is well aware that HMRC had no immediate intention of enforcing any repayment as it hasn’t done since 2008 - seems to involve a time-constrained sale of the properties that will entitle Barclays to be paid a swap termination fee, which, at today’s rates would be £280 million, before bondholders receive anything.

“It will also entitle CBRE to continue to be paid its substantial special servicing fee, other professional fees and a further fee on the liquidation of the assets.  Indeed, Barclays seems to continue to be the main beneficiary of the opaque swap, securitisation and intercreditor structure that it put in place in 2006 and which, even when even CBRE’s highly optimistic portfolio valuation of £440 million is used, is likely to result in a recovery to bondholders (who have suffered no loss as a result of the VAT shortfall) of less than £100million of their £950million investment after super-senior creditors have been paid.

“Finally, it is worth remembering that HMRC is merely an unsecured creditor ranking way behind the secure creditors including Barclays, the liquidity facility provider, the bond holders and, of course, CBRE as servicer of the bondholder loan.”