Sections remain for sale in the Oaks Business Park in Richmond near Nelson, the only remaining asset of the failed Victoria Property Fund, but a debt of more than $2.5 million hangs over the properties.
The Oaks, bought as bare land for $5.25 million in 2005, was lauded to would-be investors in a September 2006 prospectus of the Dunedin-based Victoria Property Fund to have a "valuation", once completed and if later rezoned to "bulk retail", of $18.1 million, a 244% gain on the bare-land price.
An industry source said financier Heartland New Zealand, which has clear claim to force a mortgagee sale on the remaining Oaks sections, is owed more than $2.5 million for the Oaks subdivision.
At least 15 mainly southern retiree investors face losses of more than $922,000 since being told earlier this month their "unit" shares in the Victoria fund were "highly unlikely" to see any return.
The Victoria Property Fund's manager Britannia Management, whose director is Dunedin-based financial adviser Craig Myles, has declined to respond to specific investors' questions through the newspaper.
He said rather than respond publicly, the "priority currently" is for fund manager Britannia Management and trustees Perpetual Trust to be available to meet directly with investors "as is right and proper" to answer their "queries or concerns".
The Victoria fund bought the Richmond land in 2005 for $5.25 million, some of which was covered by an unspecified loan from CBS Canterbury. CBS Canterbury eventually came under the umbrella of Heartland New Zealand, which has clear claim to force a mortgagee sale.
CBS Canterbury loans to the group operating the Victoria Property Fund once totalled $7.55 million, but much was likely to have been paid off before ownership of the loan shifted to Heartland. Heartland was contacted for comment yesterday on whether a mortgagee sale was being considered, but a spokesman declined to be interviewed on anything other than information already on "public record".
Agent for Commercial and Industrial Real Estate, Robert Williams, was contacted in Christchurch yesterday and confirmed eight sections at the Oaks were still for sale, ranging in price from $260,000 to more than $1 million. He was in talks with two separate parties, including one interested in one of the larger sections.
The Oaks Business Park was touted in advertisements as being a stake in a "property gold rush" and being the region's "number 1 business address". It was described to would-be investors, manufacturers and local businesses as a light industrial park.
However, when advising investors in early May they would get no return, Mr Myles said if Heartland forced a mortgagee sale it was "likely to result on the land being sold below its market value", with no surplus funds available.
A local property source in the district, who declined to be identified, understood 10.13ha was initially purchased for the Oaks, with the intent of putting up to 37 sections on the market, but after council intervention on reserve land requirements, section sizes and construction of a bund wall, the subdivision was scaled back to 25 sections covering 6.28ha.
Up to four sections were acquired by a local contractor, and the source said the next "key" element for the Oaks subdivision was a multisection sale to TNL Freighting, understood to be about six sections covering 2.7ha.
"That took care of quite a few sections for them," the source said.
TNL Freighting's new Richmond depot was officially opened by Nelson MP Nick Smith in early December 2011.
There remains a legal dispute between the Tasman District Council and operators of the Victoria fund over contracts to buy two Oaks' sections. The dispute is headed for the High Court.
Investors in the Victoria Property Fund can contact Simon Hartley, in confidence, at simon.hartley@odt.co.nz, or direct dial (03) 479-3527.