A £23m student development in Liverpool that collapsed into administration now has a new owner with leases returned to its investors. Tony McDonough reports
A £23m student development in Liverpool that collapsed into administration leaving investors out of pocket is now in the hands of a new owner.
Business advisory firm Quantuma has completed the sale of the freehold of One Islington Plaza in Devon Street in the city’s Knowledge Quarter. Leases have also been returned to investors in the 317-unit scheme.
Both the buyer and the value of the deal has not been disclosed by Quantuma but it was reported by Place North West in January 2021 that London-based asset manager Grangemere had submitted a £1.44m bid for the nine-storey property.
A special purpose vehicle (SPV) called the One Islington Plaza company was incorporated in 2015 and contractor Ridgemere was appointed to take on the project. It was completed in October 2019, a year after originally scheduled.
The developer sold the apartments to individual investors who then leased them back to the developer to manage the rentals. Investors were told to expect an 8% return on their money. However, the COVID-19 pandemic saw students unable to return to the city and the SPV collapsed into administration in November 2020.
Simon Campbell and Paul Zalkin were appointed joint administrators. Quantuma was appointed to oversee the administration by the development’s main creditor – Lender Route Finance which was owed £4.3m – with a sale of freehold and the return of leases agreed last month.
Simon Campbell, joint administrator and managing director at Quantuma, said: “Our work at One Islington Plaza demonstrates our ability to deliver a balanced outcome for both creditors in a complex scenario involving a number of concerned parties.
“This has been a challenging case but we’re pleased that a satisfactory conclusion has been reached for the creditors on all sides. We have a strong record of providing expert advice and support in the real estate sector.”
Addleshaw Goddard advised on legal matters and Colliers International advised on property matters.