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Gilbran hopes to spread risk of property assets

Automotive property specialist Gilbran is offering financial institutions the chance to offset risks in stakes in dealerships as the credit squeeze tightens.

The new scheme will run alongside one already in place that gives motor dealers who own freeholds the chance to reduce investments if they are concerned about a dip in property values.

Gilbran calculates that up to 230 dealerships and automotive real estate worth as much as £350 million could be at risk because of falling capital values.

The forecast is based on a survey of trends.

Gilbran owns motor trade premises in many parts of the UK and represents both dealers and car manufacturers.

The company launched a joint equity scheme as the Royal Institution of Chartered Surveyors issued a gloomy report. It said December was the worst month for the UK housing market since the aftermath of the last recession in 1992.

Nigel Smith, Gilbran managing director, said: “Lower home values have an impact on consumer spending, and that affects dealers’ profitability.”

Smith expects some banks to seek help in managing their property assets during the credit squeeze as attitudes to risks harden. Gilbran is offering an equity share scheme so that banks and other financial institutions can remove motor retail properties from their balance sheets.

No bank has yet used the scheme, said Smith, but Gilbran is willing to purchase properties or take a stake, with the two sides agreeing an equity share.

“We have the property management skills to ensure premises remain in use as dealerships,” says Smith. “That will enable a bank to share in the capital growth coming from a recovery in the market.”

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