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Hanover forces mortgagee apartment sales
By GREG NINNESS - Sunday Star Times | Sunday, 26 August 2007
Hanover Finance has flexed its muscle, forcing a mortgagee sale of the unsold units in an Auckland apartment development.
The six unsold apartments in the Harbour Green complex at 11 Union St in the CBD were auctioned by City Sales last week.
The units ranged in size from 26sq m to 78sq m. Several unsold carparks in the building were also offered at the same time giving buyers the option of buying apartments with or without car parks.
All of the apartments were owned by Winning Investments Ltd, which according to Companies Office records is owned by North Shore residents Lin Zhong, Hong Wu Zhang and Hong Shen Zhong.
Hanover Group chief executive Sam Stubbs said the company had forced the sale of the units because the developer was being being tardy in selling them, possibly hoping to hold out for a higher price.
"He wanted to hold on and string it out and collateralise the interest payments and we forced his hand because it's in the interests of debenture holders and the trustee would expect us to do that anyway," Stubbs said.
"So rather than keep rolling it over and put ourselves into a weaker longterm position, in those situations we'll move in."
Hanover was the second mortgagee on the apartments behind the Bank of New Zealand, though Hanover had loaned more money against them than the BNZ.
Hanover has been a major player in the Auckland apartment market, often as a second tier lender. Its accounts show that it had $325 million in loans backed by second mortgages on its books at December 31, 2006 out of a total $604m lent against commercial and residential property developments.
There was good buyer interest in the units when they went under the hammer last week, mainly from investors rather than owner occupiers, and there were often four or five bidders competing for each.
However, in line with the overall market for investment apartments, most sold for less than their council valuations.
"We'd usually set the minimum so that we got our money back. The fact that they sold for below their valuations doesn't surprise me in this market," Stubbs said.
By GREG NINNESS - Sunday Star Times | Sunday, 26 August 2007
Hanover Finance has flexed its muscle, forcing a mortgagee sale of the unsold units in an Auckland apartment development.
The six unsold apartments in the Harbour Green complex at 11 Union St in the CBD were auctioned by City Sales last week.
The units ranged in size from 26sq m to 78sq m. Several unsold carparks in the building were also offered at the same time giving buyers the option of buying apartments with or without car parks.
All of the apartments were owned by Winning Investments Ltd, which according to Companies Office records is owned by North Shore residents Lin Zhong, Hong Wu Zhang and Hong Shen Zhong.
Hanover Group chief executive Sam Stubbs said the company had forced the sale of the units because the developer was being being tardy in selling them, possibly hoping to hold out for a higher price.
"He wanted to hold on and string it out and collateralise the interest payments and we forced his hand because it's in the interests of debenture holders and the trustee would expect us to do that anyway," Stubbs said.
"So rather than keep rolling it over and put ourselves into a weaker longterm position, in those situations we'll move in."
Hanover was the second mortgagee on the apartments behind the Bank of New Zealand, though Hanover had loaned more money against them than the BNZ.
Hanover has been a major player in the Auckland apartment market, often as a second tier lender. Its accounts show that it had $325 million in loans backed by second mortgages on its books at December 31, 2006 out of a total $604m lent against commercial and residential property developments.
There was good buyer interest in the units when they went under the hammer last week, mainly from investors rather than owner occupiers, and there were often four or five bidders competing for each.
However, in line with the overall market for investment apartments, most sold for less than their council valuations.
"We'd usually set the minimum so that we got our money back. The fact that they sold for below their valuations doesn't surprise me in this market," Stubbs said.
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