Birmingham’s Mailbox development could be facing significant change over the coming years, owners Brockton Capital have hinted.

Speaking at a meeting of the Investment Property Forum at Barclays’ Latitude Club in Snowhill, David Zimmermann, a partner in the private equity real estate investor, accepted: “The capital structure was completely broken when we bought the estate.

“We bought it at a level that reflected the good underlying income in part of the building which we were able to leverage off. We also saw great upside in the flexibility of the space and new uses and occupiers that could be added.”

Brockton Capital was not averse to risk where it could see an opportunity and commensurate returns, said Mr Zimmermann. He added: “Walk through the Mailbox and you will see what is good about it. Walk through the shopping part and you will see what needs to be fixed.”

Mr Zimmermann said a plan has been formulated but the company was not going to launch publicly, but start implementing changes which the public would notice over time. Asked whether the building and its constituents were likely to remain the same physically, he remarked: “Unlikely.”

Mr Zimmermann told the meeting that opportunities still existed in tough times, but emphasised: “We are pickier than we were before. For us it is all about the real estate fundamentals on an investment.”

The days when office towers could be bought “with zero equity” at 100 per cent loan to value were well and truly gone, with values down more than 30 per cent from their peak.

And he warned that some operators who had done well in the good times “might never see it quite as good again”.

Mr Zimmermann said banks continued to be under “enormous pressure”, particularly with increased regulation.

He voiced his concern at the Financial Services Authority’s intention to introduce a “slotting” regime, risk-weighting for income-producing real estate loans under the Capital Requirements Directive.

And he cautioned that some regulators appeared to want to “punish” the sector for all that had happened. “They are effectively chopping the banking sector off at their knees.”