Property tycoon ‘heartbroken’ by empire’s collapse

Wales Online 26 August 2010  Martin Shipton

A PROPERTY tycoon whose portfolio was valued at £110m has become Wales’ first high- profile victim of an increasingly controversial bank loan.

Roy Thomas, who built up his Swansea-based firm RT Properties over 40 years, said he was “heartbroken” by the crash of his real estate empire.

Many prominent buildings in Cardiff and Swansea were owned by RT Properties, including office blocks such as Northgate House in Cardiff and Alexandra House in Swansea, Ha! Ha! Bar and the Slug and Lettuce pub in Cardiff and the Dragon Hotel and Marks & Spencer’s city-centre store in Swansea.

The firm also owned Swansea Airport and Mr Thomas chaired Air Wales, which ceased commercial flights in 2006 and went into voluntary liquidation last year.

RT Properties was forced into receivership by the RBS bank after it knocked between £30m and £35m off the paper valuation of the firm’s assets and pulled the plug on its credit. The bank has also imposed a £14.8m exit charge penalty on Mr Thomas personally because RT Properties was unable to fulfil its loan terms.

In recent months there has been mounting controversy about the growth in the size of loan exit charges imposed on businesses that wish to end fixed-rate loan arrangements they entered into before rates plummeted as a consequence of the banking crisis.

Most of RT Properties’ portfolio has now been bought by the property arm of RBS itself.

Mr Thomas told the Western Mail: “I am heartbroken by what has happened, which I believe was totally unnecessary. The business was doing well – we secured 39 lettings in the 24 months to March this year, including 31 which were as a consequence of high quality refurbishment.

“I was especially pleased to be able to refurbish Alexandra House in my home city of Swansea for Virgin Atlantic, which is creating 200 customer service jobs.

“We had excellent tenants including Lloyds Bank and UK government departments like the DWP and the Border Agency. There was very steady revenue and no question of tenants reneging.”

Mr Thomas said his aim had been to turn RT Properties into a charitable trust with the object of benefiting children in Britain and abroad.

He said: “I began my career as a trainee accountant in Swansea and bought some residential properties. I decided to move into commercial premises because I didn’t like putting people’s rents up.

“The way I ran the firm was always on the basis that we could be flexible about rent. Obviously big tenants would pay a full commercial rent, but there were circumstances where we were prepared to help out smaller firms when trading was tough.

“You get to think what you’re in business for, and I decided the best thing I could do would be to turn it into a charitable trust. I’m very sorry that is now not to be.”

Over the next two weeks Mr Thomas is hoping to negotiate an Independent Voluntary Arrangement with RBS that would allow him to avoid bankruptcy.

The one property he has been left with is the former Ford Visteon premises at Swansea Gate Business Park, which is unoccupied.

He said: “It’s the toughest part of the portfolio and will be a challenge, but it’s better than being left with absolutely nothing.”

On the issue of the £14.8m exit charge, Mr Thomas said: “I certainly didn’t expect it to be as much as that.”

Max Hotham of Newport- based business lawyers SRBlegal specialises in advising businesses which have been sold “interest rate protection” products by banks.

He said: “I don’t believe the potential implications of these products were ever made clear as part of the sales process. The rationale for these types of products was interest rate protection but in most cases we see it was never explained to the customer that exit fees would increase with falling interest rates.

“I have no doubt that we shall be seeing more and more casualties like Mr Thomas over the coming months.”

RBS said it did not want to comment.

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