KEY POINTS:
Real estate agents are calling the country's largest mortgagee apartment auction a "fire sale" but a financier who has called it quits denies it is desperate to sell.
Hanover Group has played down its move to abandon 92 apartments, 10 carparks and a ground-floor commercial unit in the 153-unit Winsun Heights apartment block on Auckland's Vincent St.
Sam Stubbs, Hanover's chief, said money his firm had loaned on the properties comprised only 2 per cent of his company's total loan book.
The only reason Hanover decided to sell the properties in one block was to maximise its return, he said. All the apartments were leased and Hanover expected an individual investor to be keen to buy all the units, he said.
But real estate agents are calling Hanover's move a "fire sale", promoting the deal in today's Heraldhomes with statements such as "weekend clearance" and "mortgagee forecloses on vendor", and saying they would sell studio units for as little as $65,000.
Damian Piggin and Matt Jones of Ray White Real Estate advertised the properties: "Developer in crisis mode - traders, speculators, developers must inspect". They vowed the places would be sold this weekend. Stubbs denied the deal was a desperate, forced or fire sale and said publicity generated by the unusual deal was already helping.
A front-page article in yesterday's Herald had generated strong interest and he was confident of a good outcome.
"We've had 15 inquiries since the article appeared. That's really good and we have done this in a similar way in the past, it's worked well, so it's on track."
Hanover had taken the same approach to selling Melbourne properties, Stubbs said. Hanover and failed financier Bridgecorp loaned money to the collapsed Westpoint Corporation to build 18 shops and 304 apartments in Melbourne.
A builder has already taken legal action in an attempt to get its money back after putting up the Winsun tower.
Peter Kay of Kalmar said his firm had applied to liquidate Winsun Developments because not all the outstanding money for the job had been paid.
The $12.5 million building project had gone well over a 13-month period, Kalmar said, promoting the job on its website where it said construction on a tight parcel of land had been successful.
"The construction of a 14-storey apartment block on the very restricted small site created its own challenges, not the least of which was retaining the neighbouring site, piling, and carrying out bulk excavations simultaneously.
"The project was successfully completed in December 2005."
Kay refused to say how much money his firm was owed on the job but said he knew of Hanover's involvement.
Receivers of income, Horwath Corporate Auckland, are yet to release the first report on Winsun, whose directors are Hong Wu Zhang and Lin Zhong. But Horwath said income from the apartment property at 113 to 121 Vincent St was subject to a memorandum of mortgage.
Barfoot and Thompson agent Wayne Muir said he was optimistic the apartments would sell.
