Distressed Property Refinance and Ownership Consolidation

Situation

A three-level retail property held via a trust structure experienced prolonged vacancy and cashflow stress following the departure of a major restaurant tenant. The vacancy arose after unresolved disputes with the body corporate regarding common area repairs, leading to active tribunal proceedings involving multiple parties.

Complexity

• Prolonged vacancy with no rental income

• Active tribunal proceedings involving the owner, tenant, and body corporate

• Existing senior lender unwilling to renew its facility due to deteriorated cashflow

• Internal shareholder conflicts creating pressure for a forced asset sale

• Requirement to refinance against vacant possession value rather than income

• Need to stabilise the owning entity while legal outcomes remained unresolved

  
  

Role

Property finance and capital structuring adviser, responsible for funding strategy, lender engagement, and execution.

What Was Done

• Assessed refinancing options based on vacant value rather than rental yield

• Structured a non-bank refinancing solution of up to 70% of vacant value

• Managed the transition away from an existing senior lender that declined to renew its facility

• Advised on and negotiated the acquisition of minority shareholder interests, including commercial structuring, negotiation of terms, and legal review

• Designed an integrated funding structure that enabled ownership consolidation, clean-up of legacy debts, and balance sheet stabilisation

• Sequenced transactions to avoid a distressed sale during a period of uncertainty

  
  

Outcome

• Refinancing secured despite vacancy and unresolved legal proceedings

• Ownership consolidated through acquisition, removing pressure for a forced sale

• Balance sheet stabilised and short-term cashflow stress alleviated

• Asset retained while leasing and legal matters continue to progress