A negligent valuation claim against a surveyor has been dropped in the High Court. Special purpose vehicle issuer, White Tower, claimed that Colliers had overvalued five London office properties which formed part of a commercial mortgage backed securities (CMBS) portfolio. White Tower withdrew the claim 16 days into the hearing without receiving any of the £39m it said it had lost.
This is the second major CMBS valuation success for Colliers in recent months. Late last year the surveyor won an appeal against a €32m damages award relating to the valuation of a commercial property in Germany, see Brunel News, February 2016.
The properties in the White Tower case were valued by Colliers on behalf of lender Societe Generale. White Tower claimed that the surveyor overvalued five of the nine properties in a £1.8bn securitised office portfolio. The securitisation programme went into receivership in 2009, resulting in a near £35m loss for bond holders.
Russell Francis, Head of the Colliers International Valuation & Advisory Services department, said that White Tower’s withdrawal from the case vindicated its position. “The valuation of £1.8bn, which we undertook in 2006 was well supported by evidence at the time, not only of comparable transactions, but also offers made for the portfolio from highly respected active investors in the market.”
James Burgoyne, Director – Claims & Technical, Brunel Professional Risks, believes that the number of valuation claims against surveyors resulting from the financial crisis are now drawing to a close. “Many claims are now time-barred and others seem to be a very late attempt to recover investment losses from valuers. Surveyors will be comforted that the worst may now be over.”
A report about the case has been published by commercial property data provider, CoStar.