Projects - Distressed Assets

Northeast Developments Pty Limited

Receivership of distressed retail centre

8,000m² neighbourhood shopping centre with two majors and 44 speciality shops, three levels of basement car parking (stage 1), and approval for 144-unit residential development above and adjoining (stage 2)
Appointed to manage defect rectification, secure pre-committed leases, lease up vacant shops and consider options for the residential site, which at the time of appointment was limited by an unfeasible design
Centre completed, but predominantly vacant and was very poorly designed.
Anchored by Woolworths, who were not required to pay rent until the ground floor was 75% leased
Specialty retailers claiming rent abatement due to the vacant nature of the centre. Centre was losing $1m pa

Retail – secured centre manager, several key tenancies (including second major) to activate rental payment under Woolworths lease, which resulted in breakeven position within nine months
Residential – amended planning approval to redesign and improve viability of stage 2
Sold the retail stratum and agreed delayed settlement terms above valuation for sale of the residential stratum

Identified off-market buyer at a 40% premium to residential valuation within 12 months