The £250m Tolworth Tower development project in west London owned by CNM Estates chairman Wahid Samady has been placed in receivership.
LPA receivers at Menzies have been appointed to the asset within the project’s holding company – CNM Estates (Tolworth Tower) Limited – ahead of the expiry of £66.3m of debt issued by senior lender Venn Partners and mezzanine provider Aprirose next month. Venn has sold its position, having initially issued a £42m loan, to a hedge fund which has implemented the process.
CNM Estates itself is not subject to any receivership or insolvency process and continues to trade as normal. The Tolworth subsidiary is not in breach of a loan-to-value covenant, it has serviced its debt throughout the term of the loan and Samedy retains a substantial slice of equity in the project. The appointment of a receiver was made as the outstanding debt is not expected to be paid back before its expiry through a refinancing or sale.
Samady said: “In the absence of funding that would deliver the next phase, we have taken the view that its best to sell the property and let someone else do the delivery phase. Our lending structure and the various parties involved in the lending stack, has resulted in the LPA being appointed.”
The Tolworth project, which was valued at £99m in the company’s latest accounts, is being marketed through Knight Frank. The advisor had already been undertaking marketing prior to the receivership process.
Partnerships considered
CNM says that despite the receivership it is capable of repaying the loan on Tolworth and is still considering potential partnerships and joint ventures for the project.
The company bought Tolworth Tower in October 2015 out of administration for £54.3m from Stevenor Investments, a subsidiary of Targetfollow. The deal included a completed 120-bed Travelodge Hotel and Marks and Spencer foodhall as well as the 22-storey tower itself which at the time was a largely unoccupied office.
It gained planning in early 2016 for a new project and has since completed the first 78 residential units for the rental market and agreed a new 25-year lease with Travelodge. The next phase will include 200 PRS flats, 40,000 sq ft of commercial space and within the tower itself 108 flats for sale and 68 serviced apartments.
Receivers have also been appointed to assets within three other special purpose vehicle companies owning smaller schemes that served as collateral for the debt: CNM Estates (Coombe Road) Limited, CNM Estates (Ewell Road) Limited, and CNM Estates (New Malden) Limited.
Samady says a funding deal with an institutional backer is close to being agreed on the three smaller holdings, which will lead to CNM retaining control of the assets.
CNM Estates is headquartered in Kingston and specialises in residential, student and mixed-use developments in south west London and is currently constructing 400 units excluding Tolworth and has a pipeline of a further 500 units.
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