Barclays finally sells disastrous property firm

Barclays finally drew a line under one of its most disastrous loans yesterday after it sold Imry, the property developer it has owned by default since the company's collapse in 1991. During the dark days of the recession Imry came to symbolise Barclays' hubris in becoming the biggest lender of any high street bank to the previously high-flying property sector.

Imry, which owns the Shires shopping centre in Leicester, was acquired yesterday by Dutch property company Rodamco for pounds 249m. The deal follows weeks of speculation which had paired Imry with Elliott Bernerd's Chelsfield and Capital shopping centres.

Both companies already own shopping centres, widely viewed as the property sector's hottest assets, but are understood to have been unprepared to enter a bidding war with Rodamco. The deal is the first UK acquisition for the Dutch company which launched an unsuccessful tilt at Hammerson in 1989.

Barclays has always made clear it was holding Imry solely for the purpose of selling it once the property market recovered. Banks that inherit property companies by default during recessions have gained the reputation for selling those unwanted assets at the bottom of the market after rashly lending to them at the peak of the previous boom.

Barclays attempted to buck that trend by restructuring the company in 1992 to allow its management to operate it out of recession.

Imry is Barclays' most spectacular property disaster, having cost it pounds 240m in provisions to date. In 1989, the bank financed a pounds 314m takeover of the quoted company by Marketchief, a vehicle backed by Eagle Star, Development & Realisation Trust, Prudential-Bache and Wolfgang Stolzenberg, a private investor. Barclays provided loans of more than pounds 200m to support the venture. Then, in June 1991, the bank's exposure was doubled in a restructuring to about pounds 420m.

In early 1993 Barclays revealed bad debt provisions of pounds 2.5bn, including pounds 1bn to cover its ambitious foray into commercial property during the previous five years. The property boom of the late 1980s was backed by more than pounds 40bn of bank debt and Barclays, of all the clearing banks, was the heaviest lender.

It provided large corporate loans to high-profile and aggressive property developers, such as Olympia & York, Speyhawk and Imry, much of it at the peak of the boom.

Barclays excelled at what is known as relationship banking, and backed such individuals as Gerald Ronson, of Heron International, Speyhawk's Trevor Osborne and Martin Myers at Imry. The rationale was that these men were talented businessmen and would make money for themselves and for Barclays.

A spokesman yesterday said there was no danger of Barclays repeating the mistakes of the 1980s, claiming it had sophisticated, computerised risk-assessment systems to prevent foolhardy lending. Since 1992 there has been a 37 per cent reduction in the size of Barclays' property lending book, which now accounts for 7.6 per cent of total lending compared with 12.2 per cent four years ago.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate