Westpac has pulled the plug on a big property development project part-financed by Bridgecorp in the once-booming Queenstown area, forcing a mortgagee sale.
Failed financier Bridgecorp and Westpac had loaned money for the residential subdivision at Glenorchy, about 40 minutes from Queenstown.
But agents Professionals Fisken and Associates are now selling the 16-section parcel in Glenorchy's Lochburn in a mortgagee sale.
The lakeside land has been advertised as going cheap, with a sign on the property calling it "a wholesale investment opportunity".
The land was being developed by Queenstown developer Buzz Scown, who had been selling 800sq m to 1200sq m sections in the subdivision for up to $385,000, which was said at the time to be a Glenorchy record.
Scown sold 10 lots, but the remaining 16 are now being sold in the mortgagee sale.
He had been advertising for investors on the internet, seeking people with $51,000-plus interested in the Otago region for holiday and investment real estate.
The Lochburn project has not been a financial success and loan repayments could not be met.
Adrian Snow, the agent handling the sale, said from Queenstown yesterday tenders for the property closed last Friday and the sealed offers had been sent directly to parties handling the matter in Auckland.
He was acting under instructions from Neville Tuck, a lawyer at Simpson Grierson in Auckland who was acting for Westpac, which held the first mortgage. Bridgecorp is also understood to have loaned money on the real estate subdivision. Tuck confirmed he was acting in the matter and said questions about defaults on the loan repayments should be directed to other parties.
The Queenstown area has been booming this decade with prices rising so fast that workers have found it almost impossible to get accom-modation. The township's Kelvin Heights is said to be New Zealand's first suburb where house prices hit a median $1 million.
Developers have rushed to the area, with Hanover involved in the $2 billion Jack's Point development project, Nigel McKenna's Melview Developments launching a $1 billion hotel/apartment project at Kawerau Falls, and major hotel chains all vying for a slice of the tourist mecca.
In a separate deal, Bridgecorp associate Compass Capital has loaned money in the Queenstown area for the 130ha Bendemeer Lodge and Villas project, a $140 million development at Lake Hayes where sales have been slow.