UK: Private investment firm LRC Group has acquired a 288-unit BTR block in Brentford, west London.
LRC bought the Parkview scheme in Brentford after its owner went into administration last year, according to a report from administrator RSM.
The asset is a former office scheme that was converted in December 2022. Watling Real Estate and CSquared were appointed to sell the asset at a price of about £67 million for a scheme which was once valued at more than £100 million.
RSM’s report says that 11 parties submitted bids to buy the property. A high bidder was recommended but could not complete the deal, and LRC ultimately purchased the building.
According to a report in Bisnow, the background to the administration is unusual. A group of investors put up equity to convert the former office block into rental apartments in 2017. OakNorth Bank provided a £55 million loan to support the process of completing the scheme and letting all of the units in 2021.
A leaking sprinkler pipe that caused water damage to 40 of the units in 2020 necessitated significant repairs. The ownership consortium made an insurance claim to AXA, but it was rejected after one member of the consortium, former Goldman Sachs International banker Michael Sherwood, was named in a criminal prosecution by the Malaysian government relating to the alleged defrauding of one of the country’s sovereign wealth funds, 1MDB.
The criminal case was settled and the proceedings were discontinued, but AXA rejected the insurance claim on the basis of the criminal proceedings. The decision was appealed, and AXA won, leaving the owners needing to raise £3.5 million of new equity, which they were unable to do.
In late 2022, OakNorth, which was owed £57 million, called in the administrators.
Administrators have since had to deal with a broken heating, ventilation and air conditioning system; tenants turning off their HVAC systems at the mains to try to avoid paying for heating, causing their neighbours’ systems to turn off as well; and tenants failing to pay rent, plus arrears not being recovered.
New owner LRC Group was founded in 1995 in London and operates from eight international offices in London, Berlin, Dubai, Dublin, Warsaw, Luxembourg, Malta and Cyprus.
It has €6 billion of assets under management, more than 10,000 residential units worldwide and 500,000 square metres of commercial space.
