Reuters / The Guardian - June 10, 2009
Lloyds Banking Group has hired real estate brokers CB Richard Ellis and Jones Lang LaSalle to review its property estate in a move that could spark a welter of balance-sheet boosting sales.
Lloyds, which on Tuesday said it would shut its Cheltenham & Gloucester unit, has appointed the duo to flush out opportunities for property disposals or sale-and-leasebacks, two people familiar with the situation said on Wednesday.
Lloyds intends to save up to 1.5 billion pounds ($2.46 billion) annually from its takeover of HBOS earlier this year.
CBRE will advise on a possible consolidation of the banks' eight biggest regional offices, including properties in London, Birmingham and Manchester, while Jones Lang LaSalle will focus on unlocking cash from the retail branch network nationwide, the sources said.
The property review is in line with strategy laid out at the time of the HBOS deal, when Lloyds said it would conduct a detailed assessment of its brands and the future size and shape of the combined entity.
Talks between the banks and its new advisors were described by one source as at "a very early stage" and it was not yet possible to say exactly what assets might be sold or estimate how much the lender could raise from a sales programme.
It is not yet known when the first properties could come to market, but some may be offloaded close to the bottom of an intense two-year British real estate market slump to boost the banks' cash reserves before the end of the year.
UK commercial property prices in Britain have fallen by an average of 44 percent since the market peaked in June 2007, data from CBRE shows.
Lloyds said the 164-branch network of Cheltenham & Gloucester, which specialises in mortgages and savings, would be closed in November.
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