Macfarlanes has advised on the sale of a portfolio of shopping centres owned by CBRE Britannica to Kennedy Wilson for c. £250m.  The firm acted for Malcolm Shierson and Daniel Smith of Grant Thornton as administrators and ING, Deutsche Hypothekenbank and Hypothekenbank Frankfurt as lenders.

The borrower had become insolvent as a result of the softening of retail rents together with increased void units arising from difficulties for retailers in the current climate and subsequent tenant insolvencies, creating a need to complete the transaction as soon as possible. The exchange of contracts was achieved within 20 days of instruction.

Macfarlanes first acted for ING in relation to the original financing of the Britannica retail property investment fund in 2004 and were asked to advise the lenders when it fell into covenant breach.  Once Britannica was in administration, the firm was retained by the administrators to assist with the realisation of the property portfolio.

Partner Jat Bains, supported by solicitor Paul Keddie, acted on the restructuring and insolvency aspects of this transaction. Commercial real estate partner Dominic Cunliffe, supported by senior counsel Felicity Lindsay, led on the property side.  Additionally lawyers from investment funds, tax, employment and derivatives advised on the sale planning.

Jat Bains, restructuring and insolvency partner, comments: "Whilst we have been involved in several R&I matters involving retailers over a number of years, we are increasingly seeing landlords of those retail tenants now also falling into financial difficulty. There has been a domino effect with over-indebted tenants going bust and over-indebted landlords suffering as a consequence.  At each stage, there has been a lender which has, unfortunately, had to bear a loss.  It was rewarding to have been able to help reduce these losses on this occasion."

Commercial real estate partner Dominic Cunliffe adds: "The asset sale required a phenomenal effort from our team, particularly given the vast amount of information which had to be pulled together and disseminated in a very short space of time as part of the diligence process. Given the constant threat of further tenant insolvencies potentially disrupting the sale process, we had to move quickly.  We are pleased to have met the challenges presented by this particular transaction."