Valad Property Group said it has received notice of the termination of its $726 mln (EUR 490 mln) investment management mandate with Kefren of Sweden after the company's senior banks decided to call up their loans and apply for Kefren's bankruptcy. Kefren had been in talks with its creditor banks for almost two years.

In July 2010, the company appointed Valad Europe to manage its portfolio consisting of approximately 150 properties totalling more than 827,000 m2 of lettable area. The assets involve predominantly office assets, and also includes warehouse and retail space, with tenants including Ericsson, Volvo and SKF.

Valad said it will now initiate negotiations with the banks' agent on the terms of the termination and subsequently explore opportunities to evaluate a range of possible strategic alternatives. Valad manages over $1.4 bn of assets on behalf of five other funds in the Nordic region alone.

Kefren Properties revealed a breach of its loan-to-value covenant in December 2009, prompted by a sharp drop in the year-end valuation of its assets. Following the breach of the loan-to-value covenant on a senior loan, the creditor bank had agreed to extend the stand-still period until 17 February 2010, Kefren said.

Kefren Properties IX was founded in the autumn of 2006 through the acquisition of a large portfolio from Kungsleden.