Oaktree defaults on shopping centre loan

Oaktree Capital has seen a loan on a trio of regional shopping centres breach its debt covenants after their values plunged by 17.9%. The loan was secured against the Kingsgate Shopping Centre in Dunfermline, the Vancouver Centre in King’s Lynn, and The Rushes in Loughborough. According to a notice from debt servicer CBRE, the value of the assets have tumbled from a £104.7m initial valuation in 2017 to £86m. Consequently the loan-to-value on the senior debt has reached 77.7%. The covenant was 75%. CBRE said Oaktree had not cured the breach, and that it had yet to hear back from the mezzanine lender on whether it will cure it. Oaktree bought the assets from Lloyds Banking Group in a distressed loan portfolio, known as Project Harrogate, for around £260m in 2012. The default is the latest in a string of similar covenant breaches. Among these, RDI REIT and New Frontier Properties have each breached covenants on regional shopping centre assets.  Additionally, the Nicholsons Centre in Maidenhead, owned by Vixcroft and Cheyne Capital, fell into receivership last year before it was bought by Areli Real Estate. To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette