Allied Farmers has finalised the sale of stage two of the Five Mile property development in Queenstown to an un-named buyer for a price managing director Rob Alloway says is "well above" the NZ$23.2 million his company valued the property at in its half-year accounts.
(Update adds information on Uno Finance, comments from Rob Alloway).
Allied Farmers, which acquired the site through last December's acquistion of Hanover Finance's loans and property interests, valued the property at NZ$23.2 million in its half-year accounts. Managing director Rob Alloway told interest.co.nz the sale, which has now gone unconditional, was for a sum "well above" NZ$23.2 million.
Uno Finance, whose director is Stephen Lockwood, held a prior charge of NZ$9.3 million, which Hanover put in place to finance the sale of the first seven hectare stage of Five Mile to Auckland property developer Anthony Gapes. Alloway said all the sale proceeds above NZ$9.3 million would go to Allied Farmers. The Grant Samuel independent report on the Allied-Hanover deal noted that as of June 30, 2009 Hanover's loan to Five Mile was valued at NZ$72.4 million.
"We’re very happy with the price, it’s in the zone that we expected," Alloway said.
Allied Farmers was likely to use the proceeds to reduce debt and invest in its Allied Nationwide Finance and Allied Farmers Rural businesses. Westpac recently extended a NZ$16.5 million loan to Allied Farmers and a NZ$2.5 million overdraft facility, both due to expire on July 1, until Setepmber 24.
Although Alloway won't name the buyer of the the 23.3 hectare Five Mile second stage, it is a company that has previously been involved in property development in the Queenstown District. If the company wanted to out itself and reveal the price, that was its perogative, he added. In May Alloway told interest.co.nz in May stage 2 of Five Mile should be able to be used for commercial, medium density, residential and commercial yard space purposes.
Meanwhile, Alloway said given the current weak state of the property market, Allied Farmers was very pleased to achieve a price "nearing the upper end" of the valuation scale.
“We’ve always said that, given time, we could realise value from the former Hanover assets for our shareholders and indeed this has proved to be the case with Five Mile” said Alloway.
He said the buyer didn't want to be named at this stage, but the company was familiar with the Queenstown District and had previously done development in the region.
“They came late to this negotiation with a pretty compelling offer and we are very pleased to be able to have concluded such a significant deal. When both the buyer and seller are happy then the deal is usually about right,” said Alloway.
The deal is due to settle in mid-November.
The Five Mile property was once owned by Christchurch property developer, Dave Henderson, who through Five Mile Holdings Limited, revealed plans to build a boutique town centre and residential development on the site. It was originally designed to house 10,000 people in a “Tuscan style” villa/apartment development near the Queenstown airport.
Hundreds of millions was due to be spent on the development, which was touted as a NZ$2 billion project once completed. However, Five Mile Holdings Limited was placed into receivership by Hanover Finance in July 2008. Allied, through subsidiary 5M No.2 Limited, acquired 23.2 hectares of the original development following a restructure of the asset by Hanover last November that saw it taken out of receivership.
The first stage of Five Mile, much of which was excavated for an underground car park, was sold in November 2009 by Hanover to Queenstown Gateway Trust Limited, led by Gapes.