Quintain Reports Stabilization of UK Property Market

The Quintain company – a British estates and development firm – recently claimed its fears of breaching banking covenants are not likely to come true as the rate of decline in property values significantly reduced in the 2nd quarter of 2009. Let us remind that in June the company had serious concerns over its ability to continue with the business because of a sharp fall in property values, which constituted 11% in 2008 (April through September) and 9% in 2009 (September through March). The company said it might have been in breach with its lending terms unless the situation on the property market changes. The latest statement of the firm’s finance director, Mrs. Rebecca Worthington, suggests that the Quintain’s business is back on track as the sharp falls in property values seem to have stabilized. Moreover, according to Mrs. Worthington, some types of property, including prime and specialty assets, such as student housing, are showing signs of improvement. The comments of the company’s finance director prove the widely-held opinion that the UK property market will bottom out after the decline in property values reaches 45%. It should be noted that in the past quarter Quintain, which currently has net borrowings of £547 million, negotiated a change in the short-term facility with Barclays. Also, the firm was obliged to sell property worth £34.7 million, which was owned by Quercus, Quintain’s healthcare fund. Let us remind that the Quintain Estate and Developments specializes in regeneration activity; it is currently developing areas surrounding the Wembley Stadium and the O2, located in Greenwich. The development of hotels, retail streets and conference centre around Wembley was adopted by Brent Council. Meanwhile, Quintain says it is currently negotiating the sale of O2, which it owns along with Lend Lease.