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Birmingham, 31 January 2014 - With New Year's resolutions fresh in mind, January is the time when many people's thoughts turn to workouts - and ways of removing toxic substances from their systems.
However, at the Birmingham office of Jones Lang LaSalle (JLL), although such concepts are definitely in the air, they have a rather different and more corporate feel.
Just before Christmas, the Church Street advisers poached two senior corporate recovery specialists from GVA's local office, to lead a new 'Real Estate Work-out' team, and now they're ready to work with banks, accountants and insolvency professionals across the region.
Alistair Wright and Simon Hunt believe 2014 will be the year when the UK lenders start to release more distressed property assets following the resolution of Swap issues to benefit from the upturn in both the property sector and the wider economy.
The two friends spent the last circa 20-years at their previous employer, so they're very familiar with the Midlands' corporate landscape, having worked on many of its biggest insolvencies and administrations, involving property assets, over the last decade.
“In our sector, you don't build your reputation by talking about organisations you've acted for, or schemes you've worked on, because absolute discretion is essential,” admits Simon.
“We were just going through our old diaries before Christmas though, thinking about the volume of work we'd completed, and we reckoned we'd handled assets of circa £0.5 billion, just in the last five years.
The duo - who will work within JLL's national Real Estate Work-out team - believe most of their work will fall into two categories.
"One of our roles will be acting for lenders as fixed charge Receivers, which is where we are directly appointed over distressed property assets. We can then look towards a disposal or a hold strategy and try to add value over time," predicts Alistair.
“The other most likely occurrence is that Administrators of Companies appoint us to act as their agents to advise them on value, restructuring and turnaround and if appropriate, disposal advice.
“It's also possible that as market sentiment strengthens, we'll start to see more lending by banks, and even the insurers, as low interest rates make investing in property more appealing.
“In general though, if we were looking back at 2014 in a year's time, I'd expect to have seen that a wide range of opportunities had been created, as the economy improved and lenders continue to strengthen their balance sheets by releasing distressed assets.January may be a time for resolutions, but it's noted in the City as the retail reporting season, and last week's trading statements from some of the country's biggest brands underlined the volatility which continues to dog the High Street.
“We thought the earlier news from Debenhams was bad enough, but when it was clear that Mothercare, Tesco and M&S had also struggled over Christmas, followed by a profit warning from Morrison's, everyone realised just how weak consumer spending had been during the crucial festive period,” says Simon.
“We had been expecting to see more insolvencies and administrations in retail during 2014, before those statements, and they only confirm that perception. Other sectors where there will be more shake-outs are leisure and healthcare, and the secondary industrial market.”
Alistair also expects that as history has shown us in the past, as the economy improves there can be corporate casualties caused by over-trading, which means Insolvency Practitioners, and their agents get busier.
"There is definitely oxygen in the air and increased confidence in the regions as well as London. The release of property stock from the banks will certainly provide opportunities throughout the property market and wider economy and with improved overall confidence we expect a major up-tick in property transactions."
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