A real estate investment manager has agreed a deal with lenders to waive covenants on a loan secured against one of Britain’s largest shopping centres in a situation that shows how far the values of even the best shopping centres have fallen.

The servicer to a £142M loan secured against the 1.3M SF Derby Centre, previously called Intu Derby, said in a notice to bondholders this week that interest-cover and loan-to-value covenants would be waived until April 2022.

The centre is owned by Cale Street, the investment manager backed by the Kuwait Investment Office.

Cale Street previously owned the centre in a 50/50 joint venture with Intu, the giant shopping centre REIT that went into administration in June last year.

Cale Street paid £186M for a 50% stake in the centre in 2019 and took complete ownership of the asset following Intu’s administration.

By September 2020 the value of the entire centre had fallen to £203M, according to a research note from S&P Global, as the value of retail assets was brutalised by the coronavirus pandemic.

The note from Situs, the debt servicer, said that the borrower had agreed to repay £13.5M of the loan and make its loan interest payments two quarters upfront on a rolling basis in exchange for the loan covenant waivers. The loan was originally provided by Deutsche Bank and then securitised.