The joint receivers of Dunedin’s securitised Industrious portfolio have said they intend to sell the property assets in the first enforcement of a defaulted commercial mortgage-backed securities (CMBS) debt.

In a statement to the Stock Exchange today the issuer said it had been advised by RBS, acting in its capacity of cash administrator, that the joint receivers had informed RBS they would carry out an enforcement.

The receivers told RBS that : 'Further to our call with noteholders on 12 March 2009, I write to advise you that we are progressing with the preparations for implementing our disposal strategy of [sic] the underlying properties in the Dunedin Group.'

Nearly seven months ago Dunedin’s 10m sq ft Industrious portfolio was placed into receivership.

It was the first UK property company to go into receivership with commercial mortgage-backed securities (CMBS) debt. Dunedin’s debt of £650m in total was provided by a group of different lenders. RBS was the majority lender to Dunedin Property Capital Fund Limited and Dunedin Property Industrial Fund (Holdings) Limited, the two holding companies that went into receivership.

RBS lent £476.8m of super senior debt; £31.9m of senior debt; £54.5m in mezzanine finance and £18.3m in loan notes. The rest of the debt was provided by Marathon and Cheshire Building Society, also through mezzanine finance of £30.2m, and Cambridge Place/Torre Asset Foundation, which provided £38.9m of mezzanine debt.

Enforcement has been delayed because of disagreement among its creditors. Alan Bloom, Alan Hudson and Colin Dempster, partners in Ernst & Young, were appointed joint receivers. King Sturge was appointed in November to advise on property options. Seasoned sheds investors from Hansteen to Highcross have already registered their interest with receiver Ernst & Young.

The conference call earlier this month summarised the receivership process so far up to that date and provided an overview of the future strategy to be implemented.

The last valuation of the portfolio was £521m leaving a vast, at least £150m gap between the value of the portfolio and the debt secured on it – a shortfall which could be growing as values decline further.

RBS securitised the super senior debt on the portfolio in 2006 via the Epic Industrious CMBS issue, so these bondholders will be the first to get their money back.