The Grosvenor Estate is in advanced talks with bankers to prevent its property fund business breaching bank covenants.

Mervyn Howard, the head of Grosvenor's UK fund management, said: 'The Grosvenor Shopping Centre Fund is in advanced discussions with their lenders on the terms of a renewal of their bank facilities.

'We report quarterly to investors and at the end of the second quarter of 2007 we reported that we were concerned at the level of debt and we needed to address it.

'It was at our suggestion and we have been in dialogue about initiatives ever since then.

'We can understand investors' frustration at the performance, this is an issue not just for our funds but all property funds.'

The Observer, The Telegraph