Decision details

To approve the reserved matter below, to allow ADL to progress with the disposal of 7 Riverside View apartments on the open market using a phased approach using the surplus monies to reduce the level debt on the 5 remaining apartments to ensure continued viability.

Reserved Matter 22 – approval of total asset disposals that will exceed £500,000 but less than £5M.

A full review of the ADL Property portfolio was carried out on a property-by-property basis, to provide assurance that the individual properties remain viable at higher interest rates on the related debt.

The review identified that the 12 Riverside View apartments purchased from Aequus Construction Limited, although purchased at a market discount price, are becoming increasing unviable given the level of gearing and significantly rising interest rates.

To mitigate this risk, ADL have prepared a model and identified that 7 of the 12 apartments could be sold to the market, and the resulting surplus used to reduce the outstanding debt on the remaining properties. In order not to flood the market with the Riverside View apartment sales, ADL will release the apartments for sale on a phased basis as they become vacant, or tenancies expire.

Consideration was given to retaining the 7 units, however, the negative impacts in terms of drain on cash and overall viability resulted in the decision to sell the properties being the preferred option.