Lloyds to sell commercial property gained through HBOS takeover

Lloyds Banking Group has announced it is planning to sell off large commercial property assets.

The assets were inherited as part of its takeover of HBOS and the sale is in response to an increase in commercial property values in recent months.

Sources close to the bank claim that each property will be valued in excess of £100 million and each will be put on sale within a few weeks.

Lloyds is planning to sell only the best of its properties initially. The commercial properties have come into its ownership after investors breached their loan terms or defaulted on their mortgages.

Average prices for commercial properties have increased by 10 per cent since last summer, with the bulk of the increases being mainly seen in the market for high-end London offices and retail buildings, which are attractive to international investors.

There are no plans as yet for Lloyds to begin selling off its secondary assets - the property that is less desirable.

The announcement is likely to add to concerns voiced recently about the banks swamping the market with poor quality commercial property. The concerns were raised at the annual industry conference, Mipim, which was held in Cannes earlier this week.

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