02.10.2008 - Low valuations could pull plug on property funds
From Citywire: A 22% crash in the value of commercial property may break loan agreements, forcing banks to foreclose on property funds. The year-on-year collapse reported by the IPD UK Quarterly index could lead to the value of property dipping below the loan-to-value limits set out in bank loan agreements. Up to now banks have been happy receiving interest but next quarter’s round of valuations could force them to act, warned analysts at Cenkos Securities. A £520 million industrial property portfolio from investment group Dunedin was forced into receivership earlier this month after it failed to secure funding to cover a breach in its loan covenants..... Full Article: Source