Downing Group loses control of Capital building

The George Downing Group will not disclose whether it has walked away from Liverpool's landmark Capital building with any money.

The building fell under the control of American investment house Cerberus Capital Management as part of a debt portfolio sold by Lloyds Banking Group in May.

George Downing Group, which owns commercial properties across the country, had been in negotiations to acquire the Capital building from Cerberus through a new refinancing deal with a third party.

However, negotiations broke down this week and the group has now relinquished all interest in the Capital building. It is understood that Cerberus would not agree on a price with Downing.

Downing acquired the 390,000 sq ft Capital building at the height of the property market for £50m in 2006 from Royal & Sun Alliance. The deal was financed by Lloyds.

Downing has spent £15m on refurbishments.

A spokesman for Downing said he believed that the company would have been given some money by Cerberus in relation to the building but that any figure would not be disclosed.

In a statement, Downing said: "Downing has reached the difficult decision to relinquish ownership of The Capital in Liverpool after more than seven years' successful association with the building.

"The funder we originally worked with, Lloyds Banking Group, sold its interest in the building earlier this year as part of a wider £300m portfolio of properties removed from its loan book.

"At that time Downing made determined efforts to secure our future ownership of The Capital and understood we were the highest bidder in the process started by Lloyds Bank.

"Our bid proved unsuccessful because the bank would not sell the Capital as a stand-alone property but only as part of a wider portfolio of commercial buildings.

"In the event, Cerberus Capital Management acquired the debt on the building.

"We have been negotiating with Cerberus in recent months but unfortunately have been unable to agree a valuation. It is with regret, therefore, that we have decided to remove The Capital from our portfolio and future plans."

George Downing Group owns properties across the country, including the Port of Liverpool building and number 1 Old Hall Street.

No-one at Cerberus was available for comment.