Buyers are likely to hesitate about purchasing at partly-built Pegasus Town, near Christchurch, now that it is in receivership, despite assurances from the developer that it is business as usual, says one local real estate agent.
By Susan Edmunds
Developer Bob Robertson said difficulty refinancing a loan had caused the receivership but he said it would be business as usual for owners and buyers of Pegasus properties.
Andrew Cowdy, owner of real estate firm Cowdy and Company, said the receivership might depress prices and interest initially.
But he said it was likely Pegasus Town would rebound. “I think the stage is set and set very well. I would think they’ll get over it. Uncertainty does destabilise things and make people a bit wary but a lot of houses have been built up there. If the section is already formed there’s really no risk. Off the plans, you might think twice.”
The receivership action was taken by New Zealand Property Finance Partners, an investment consortium owned by Australia's Brookfield group and investment banker Goldman Sachs. The consortium bought a loan over Pegasus Town Ltd from the Bank of Scotland last year.
Pegasus Town had been trying to buy back the loan from Brookfield and Goldman Sachs, but could not get the finance.
Robertson said he was told that the receivership was to spur action and encourage the loan to be bought. “They said hopefully this will hurry you guys up… we found that a bit strange when we were on the cusp of a refinancing deal.”
He said Pegasus Town Ltd had no external debt, and all staff salaries had been paid until the end of the month. The receivership did not affect his company, Infinity Investment Group Holdings.
Robertson said the town was on the “downhill slide” to completion and was not struggling for cash. He said he thought the receivership issue would be resolved quickly. There had been $50 million of sales since Christmas.
Meanwhile, an Auckland developer has been declared bankrupt, owing millions of dollars for failed projects including the $250 million Soho Square development in Ponsonby.
The site was bought by Progressive Enterprises last year but developer Layne Kells was left with a $77 million debt for that project alone.