Economy

Judge: corona crisis no excuse to roll back real estate deal

This is evident from a recent ruling by the preliminary relief judge of the Amsterdam District Court. Metroprop director Jos van de Mortel says he will appeal the decision. “This is such a curious verdict. This judge completely missed the mark by completely ignoring the corona crisis.”

Million Deal

Metroprop is a medium-sized real estate company that invests in shops and offices. During the Mapic retail fair in Cannes, France, Van de Mortel met colleague Sharim Elzas from Coltavast in November last year. Coltavast is the real estate company of the Alsace family, also owner of the recently bankrupt fashion chain Didi.

In Cannes, they agreed that Metroprop would acquire two Coltavast retail properties. These concerned properties in Maastricht and Rotterdam, with rental income of more than 900,000 euros per year. The acquisition price: over 18.1 million euros.

Financing problems

However, on March 16, Metroprop announced that the deal had to be postponed. Because the bank and a foreign financier were difficult due to the corona crisis, the financing could not be made on time. The intended sale of four own properties would also not go ahead. The real estate investor invoked force majeure.

But seller Coltavast did not accept that. The Alsace family went to court, and were right there. According to the preliminary relief judge, Metroprop was unable to confirm that it cannot pay the purchase price. And even if it can’t, the judge said it wouldn’t be a reason to cut the deal.

No reservation

The purchase agreement has not been concluded subject to financing. As a professional real estate investor, Metroprop should have been aware of the risk of this, according to the judge.

Metroprop director Van de Mortel emphasizes that he cannot keep the deal. “The banks do not provide financing. But the objects are also damaged, the catering facility in the building is closed, and the shops do not pay full rent for months. It is like delivering a car that has been on fire.”

That is why Van de Mortel sees opportunities with an urgent appeal. Coltavast was unable to comment on the real estate dispute this afternoon.

Business deals disrupted

The property deal between Metroprop and Coltavast is by no means the only business transaction disrupted by the corona crisis.

For example, there was or was a fuss about the acquisition of the Brabant equestrian company Global Champions Tour, the Dutch investment bank NIBC and the seller of fashion accessories J-Club by the Dutch investor Nordian.

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