LONDON: Real estate investor Simon Halabi’s London office towers will be offered for sale early next year with an initial goal of raising 400 million pounds within six months to recoup cash for creditors, two people familiar with the situation said.

CB Richard Ellis Group Inc., manager of 1.15 billion pounds of defaulted bonds backed by the offices, will offer the buildings needing renovation first and market each of the towers individually, said the people, who declined to be identified because the information isn’t public. It’s unclear how many of them will go on sale initially, the people said.Simon Halabi didn’t respond to a phone request for comment. His spokesman, Kamlesh Bathia, didn’t reply to phone and e-mail messages. Vicky Coneybeer, a spokeswoman for Ernst & Young, declined to comment.

CB Richard Ellis and administrator Ernst & Young LLP will soon announce the appointment of two brokers to market some of the buildings. Six of Halabi’s nine London towers were put into administration last month, protecting them from government seizure for unpaid taxes.

The planned sale of the buildings follows a 44% drop in UK commercial real estate prices since the peak in mid-2007, according to Investment Property Databank Ltd. Halabi’s properties, which include JPMorgan Chase & Co.’s offices at 125 London Wall and 60 Victoria Embankment, are tied to the UK’s biggest commercial mortgage-backed securities deal to default this year.

The nine towers were worth 1.83 billion pounds when they were packaged against the bonds in 2006. The bonds, issued by White Tower 2006-3 Plc, defaulted when a June revaluation showed that the buildings’ value had fallen by almost 50%.

The nine properties would probably fetch about 900 million pounds on the market, Barclays Capital Inc. estimated in July. Junior bondholders would probably lose about 300 million pounds in a sale at that value, the bank said.

Canada’s biggest pension fund manager, Caisse de Depot et Placement du Quebec, might lose 285 million pounds as the holder of a loan subordinate to the White Tower bonds, two people familiar with the situation said in a Bloomberg story published Aug. 26.

Loans against hundreds of buildings were securitized throughout Europe, with more than 60% packaged near the market’s peak. They include Paris’s Coeur Defense, the largest office complex in Europe; London’s city hall; German apartment blocks; and British hospitals and care homes. - Bloomberg

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