Valad Property Group has set up a £1.1bn European property joint venture with Bank of Scotland.

Valad has contributed most of its European and UK assets and all associated debt to the Duke joint venture, which will run for three years. These assets include its two joint ventures with Bank of Scotland plus other property assets of £230m.

In addition, Valad has contributed €10m and will contribute a further €15m in cash over three years. Valad has also contributed its investment in Crownstone, which had a value of €50m at December 2008. Valad’s €40m contingent liability relating to the German Aktiv Fund has been cancelled.

Duke has assumed the existing debt facilities associated with the assets, the terms of which have largely remained unchanged, and which also have a term of three years. Bank of Scotland has provided new undrawn facilities of £66m and will receive a fee of £25m on termination of the debt facilities.

Valad European funds management business continues to be owned by Valad and will provide management services to Duke.

Peter Hurley, Valad’s managing director said: ‘In February we outlined a number of milestones to stabilise our balance sheet. This announcement represents the fulfilment of a major element of that strategy. It also allows Valad to continue to hold an interest in a major European pool of assets which is positioned to benefit from any future recovery in market conditions’.