On Friday it was announced that shopping centre developer, Modus Ventures, had been put into administration by its lenders. HBOS, part of Lloyds Banking Group, was the lead creditor to the firm.
The collapse was blamed on the tough conditions and tumbling values in the commercial property sector, with one shareholder of the group saying they had “over-borrowed” in recent months and could no longer service the debt.
The Manchester-based company owns more than 40 subsidiary firms in the UK; however administrators KPMG have said that no other businesses linked to Modus Ventures will be affected.
The UK head of restructuring at KPMG, Richard Fleming, has said that the group “will be one of the first in a long line of commercial real estate casualties.”
He added: “We predict a wave of fall-outs in the commercial property market as the true value of losses becomes apparent. Indeed the wave of restructuring that will be required in the commercial property market could be the next big mile stone in this recession.”
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