The landmark Howells building in the centre of Cardiff will be put up for sale after confirmation that the investment vehicle that owned it has gone into receivership.
Last month it was revealed the Grade II-listed building needed £25m of repairs and renovations to make it safe.
And now Avison Young has been appointed so called fixed charge receivers. It has has been tasked with selling the iconic building, which extends to 270,000 sq ft, in the hope of securing some return for the financiers of the acquisition.
The property had been acquired by Naissance Capital Real Estate in 2016 for £37m. The property asset was owned by a special purpose investment vehicle based in Jersey called Wallace Properties.
The deal had been financed by a combination of equity investment and bank debt. The property asset itself and not Naissance is in receivership.
While Avison Young declined to comment, it is understood they were appointed by lenders following a default on repayment.
It is also understood that it has already received expressions of interest to acquire the property asset.
Nathan Pask, Avison Young, said: "We can confirm that Avison Young has recently been appointed as Fixed Charge Receivers of 8 - 18 St Mary Street and 9 - 18 Trinity Street, Cardiff.
"We respect the building’s 150 year history in the city, and its rich cultural significance to generations of people who have passed through its doors, and at this stage we are focusing on gathering information about the property before making any decisions on what the next steps might be."
The receivership doesn't impact on the status of the building's main tenant in retailer House of Fraser. However, since its acquisition by Sports Direct tycoon Mike Ashley there remains a question mark over its future occupancy of the building.
A leaked report from consultants Gleeds last month revealed that the cost of renovating the building would be around £25m for basic repairs and up to £45m to incorporate a hotel and other developments.
Over the summer Azeemeh Zaheer, chief executive of Naissance Capital, had revealed plans to transform the Victorian built building, to provide new leisure, food and beverage, residential and office space.
The plans also included uncovering the Bethany Chapel that had in effect been swallowed up by the building.
In September this year the Prince’s Trust Cymru announced plans to take 12,000 sq ft of space in the building.
However, that was only an agreement in principle, subject to the required fitout and time frame, so they aren't legally bound to take the space.
The Prince's Trust Cymru declined to comment, but it is understood to now be reviewing its property options.
Matthew Phillips, managing partner of the Cardiff office of international property advisory firm, Knight Frank, said it was hoped that a new future for the building could come out of the receivership process.
Mr Phillips said: “It is a magnificent building and piece of real estate in the centre of Cardiff. In a way it needed to go bust to allow for a recalibration on its value with a view to re-purposing the building as a mixed-use development, with potential for office space, a hotel, retail and residential.
“The receivers will now be trying to get the best return possible for investors, but there there will a realism on the value of the asset."
