ADMINISTRATORS have been appointed to Reed Property Group's second largest shareholder and financer, Lehman Brothers Australia.
The move will leave the property group without a financial backer and financier.
As well holding a 40% stake, Lehman
But last Friday, it was announced that PPB has been appointed administrator of Lehman Brothers Australia.
This is despite Nomura Holdings earlier last week buying out the Lehman Brothers’ Australian business.
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According to administrator Stephen Parbery, Lehman
Lehman
Earlier this month, Adviser Edge’s head of property research Louis Christopher said the failure of Lehman has removed an important source of financial strength from the responsible entity and the trust.
Adviser Edge has placed its three-star rating on the Reed Property Trust on hold.
“The loss of the Lehman facility undermines the trust’s flexibility in achieving this target and makes it more vulnerable to a softening in cap rates or a slowdown in investor inflows.
“Further, due to limited access to financial information regarding the Reed Property Group during the review process, Adviser Edge was unable to issue an opinion regarding its financial condition or the extent of financial support that it could provide to the trust,” he added
The trust’s primary source of debt finance is a facility with National Australia Bank. As at August 2008, the trust had a loan valuation ratio of 69%, however, the debt covenant requires the trust to reduce its LVR to 65%.
Reed Property Trust is an unlisted open ended trust investing in a diversified property portfolio, with approximately $202 million of funds under management.
The trust owns the Central One building in Townsville CBD; Chancellor Village Business Centre Sippy Downs, Queensland; Canberra Eye Hospital Symonston, ACT; Telstra House Dickson, ACT; APN Toowoomba print facility at Wilsonton and Yandina, QLD; a BlueScope industrial facility in Coolum, QLD; the Silver @ The Exchange office building on the Gold Coast; and the Chancellor Homemaker Centre and Chancellor Convenience Centre Sippy Downs.
Australian Property Journal