Commercial Estates Group administration: Assets sold to linked company after losses and £33m creditor debts
Assets belonging to property giant Commercial Estates Group (CEG) have been sold to a recently-formed associated company following the firm entering administration after recording successive multi-million pound losses.
CEG, which is involved in several major real estate schemes in Yorkshire including the Kirkstall Forge and Temple Works developments in Leeds, entered administration earlier this month with KRE Corporate Recovery appointed to lead the process.
The company employs around 120 people, with offices in London and Leeds, specialising in the residential, office, industrial and strategic land sectors.
As of November last year, CEG’s portfolio was said to cover six million square foot of land, at a valuation of around £800m.
Some of CEG’s assets have been sold to a new company, which is called RPG.
Companies House states RPG1 Management Limited was founded in July and is controlled by CEG founder and chairman Gerard Versteegh, with CEG chief executive Matthew Farrell also listed as a director.
A spokesperson for CEG said: “The entity Commercial Estates Group Limited (CEG) has gone into administration.
"CEG is an entity which provides management services to client companies and does not own any property assets.
"The property-owning entities managed by CEG are unaffected.”
The situation follows CEG posting an £8.4m loss in its most recent annual accounts, which related to performance in 2023.
That loss followed an earlier £6.7m loss in 2022. In contrast, a profit of £15.3m was recorded in 2021.
The 2023 results said its £8.4m loss that year was “largely linked to a challenging year for the regional property investors”.
It added that a reduction in recurring revenues “was due to a combination of disposals of properties under management and an overall decrease in property valuations which resulted in a reduction in management fees being charged”.
The results stated creditors were owed £33m due to be repaid within 12 months. Overall turnover in 2023 was £10.5m, down from £12.3m the year before.
The results, which were filed this February, said at the time that the company was implementing a series of measures to improve business performance, including renegotiating a historical loan facility with related party Gerard Versteegh Holdings Limited.
The report said that in exchange for reducing the debt from £21.4m to £4m, CEG intended to guarantee quarterly repayments.
It said the proposal would allow the net assets of the company to improve by £18m.
Other announced measures included a review of all existing management fee agreements to charge for additional services not within the scope of existing agreements.
The February report said there was a “material uncertainty” about CEG’s ability to continue as a going concern as it was reliant on parent company the Dooba Group for financial support which was not guaranteed.
It added that a significant portion of the company’s liabilities were to the Dooba Group.
A CEG spokesperson confirmed the last financial loss and the money owed to creditors had impacted the decision to enter administration. They said: “The vast majority of the creditors referred to are CEG shareholders or related companies.”
KRE Corporate Recovery did not respond to a separate request for comment about the circumstances of the administration.