Funders redeemed loans during pandemic lockdown, say administrators

A developer of private rental blocks owed creditors £212m when it collapsed at the end of last year, according to a report by its administrators.

The High Street Group, which built a land bank of private rented sector projects (PRS) worth £1.3bn, collapsed last year after some of its high net worth funders redeemed their loans in the pandemic.

In their report, administrators SKSi and Insolve revealed the group owed £212m, which was made up of £124m to investors and £87.7m to unsecured creditors.

The High Street Group moved into the private rented sector six years ago and built a land bank of projects targeting cities across the UK including Birmingham, Manchester and Newcastle. It had 13 schemes in its land bank worth £1.3bn, including Hadrian’s Tower in Newcastle and Middlewood Plaza in Manchester.

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The administrators’ report said that the company devised an investment strategy “targeting high net worth investors who could invest into loan notes”. It built in a clause allowing early redemption of the loans once a year.

The coronavirus lockdown in 2020 led to a halt on construction projects, investors postponing funding and high net worth lenders redeeming their loans.

A number of winding up petitions were issued against the company before it was placed into administration on 16 December last year.