Shopping-centre portfolio may have tumbled by £200m

David Ross is believed to have used his hundreds of millions of pounds worth of shares to get loans for major property investments which have since collapsed in value.

He started buying into UK shopping centres and High Streets in 2003 through his Kandahar Group, and built up a one-million-square-foot portfolio worth £243 million.

In November 2006 he established Kandahar Real Estate, a 50-50 joint venture with US investment bank Morgan Stanley focused on retail and leisure schemes around Britain.

Ross injected the £243 million portfolio of shops and restaurants into the joint venture while Morgan Stanley contributed Drake Circus, a 560,000-sq-ft shopping centre in Plymouth worth about £250 million.

However, the value of the Kandahar estate has tumbled from £500 million when the joint venture was set up to as little as £300 million today.

Property experts said shopping centres have fallen between 25% and 40% in the last two years as the boom of earlier in the decade ended.

An analyst at Oriel Securities said: "We understand that David has built up a rather large exposure to retail property over the last five years and, we contend, that must be worth a lot less now than it once was."

The portfolio includes the Jackson Square shopping centre in Bishop's Stortford near Stansted Airport, Church Walk shopping centre in Caterham, Surrey, three shops on Thames Street in Kingston as well as shopping centres in Nottingham, Ipswich and Knutsford.

Kandahar Real Estate is run by Martin McGann, former finance director of Pillar Property, bought by British Land in 2005 for £811 million. Also on the executive team is Mike Tyler, who was responsible for asset management in Pillar's Hercules fund, and Amanda Hill, former head of property at Carphone Warehouse, where she was responsible for the chain's growth from 20 stores to 600. Tyler today declined to comment.

Kandahar Group is based at Nuffield House on Piccadilly in the West End but registered in Gibraltar.