Auckland developer Wilshire Group buys Springpark out of receivership

Auckland residential property developer Wilshire Group has bought Tony Gapes’ failed Springpark development in the suburb of Mt Wellington out of receivership for an undisclosed sum.

The company's offer was accepted by receivers Richard Simpson and David Ruscoe of Grant Thornton last week and has gone unconditional, it said in a statement. Wilshire had already bought two of the development's three stages from the previous owner and expects to start building new houses this year in what will be a four-year project involving 450 to 500 new properties. 

"We will continue with most of the previous plan but look to make improvements to enhance some parts of the urban design," Wilshire general manager Mark Peldmanis said. The houses "will still be reasonably priced, quality homes interspersed with open spaces, but given the rising cost of construction and housing in New Zealand the previous offer prices are simply not viable." 

The Springpark project was owned by Mr Gapes through his majority-owned company Panama Road Developments.

Designed to offer a range of mostly two and three bedroom affordable homes, Springpark suffered from delays and cost overruns leading to the appointment of receivers for a second time in December last year.

The main creditor is Koi Structured Credit, a unit of Cayman Islands-registered Olympus Capital Asia. The first receivers’ report filed in February said Koi was owed a net $22.5m.

Mr Gapes told NBR only 16 homes were partially built and construction had been on hold for several months pending approval of consents for fire safety.

“Our loan with Olympus Capital expired in October and we have been doing our best to refinance them over the last few months but, unfortunately, the project has just had too many delays and too many unforeseen cost blowouts and it is no longer viable enough for a new funder to want to come in and fund it.”

Prospective buyers who had paid deposits on149 unbuilt homes were offered their deposits back in full – an amount totalling $6.98 million plus interest.

Wilshire said some purchasers who pre-bought houses want to proceed and have been offered a discount on the final price while others chose to get back their deposits. 

Wilshire's portfolio includes more than $150 million of residential and commercial property across Auckland and is majority-owned by Hong Kong resident Vincent Wan.