Deal puts troubled subdivision into new hands

The Lakes subdivision. Photo / APN

One of the country's largest housing subdivisions has been bought, just over a year after it plunged into receivership.

The 250ha Lakes residential community on the western outskirts of Tauranga - which at one time was forecast to have a value of more than $1 billion once completed - has been bought by local developers Carrus Corporation.

The price has not been disclosed.

Carrus was mooted as a potential buyer just days after original developers Grasshopper Farms went into receivership in February last year, owing about $100 million to its first mortgagor, the Bank of Scotland.

At that time, the subdivision - considered a separate suburb of the city - was valued at just a third of that amount.

When Grasshopper began developing the three-stage subdivision in 2005, it was expected that within 10 years The Lakes would be home to about 6000 people in a mixture of stand-alone dwellings, townhouses and a retirement village.

A total of 522 titles have been sold to date, with 1273 lots left to build.

Carrus managing director Scott Adams said his company was now looking to bring prices of houses in the subdivision "back to a more market-competitive level".

"Over the 10 years leading up to the global financial crisis, Tauranga was the fastest growing city in the country.

"There's a lot of people in the local building industry who have been sitting around twiddling their thumbs, so it will be satisfying for us to get the local economy moving again," said Mr Adams.

Activity at The Lakes was expected to move forward alongside the neighbouring Tauriko Business Estate, said Andrew Coker, chief executive of the Western Bay of Plenty's economic development agency Priority One.

"It's regrettable for Grasshopper - they just got caught at the wrong part of the cycle - but it's great that it's in local and competent hands."

Carrus acquired the subdivision through its newly established Lakes 2012 Ltd.