This article is from the Australian Property Journal archive
A PARTIALLY constructed apartment tower in the Blacktown CBD previously owned by collapsed developer Merhis Corp has sold under the hammer.
The development sold for $11 million to a “leading residential and commercial property developer”.
Colliers’ Matthew Meynell, James Cowan and Jordan McConnell, in conjunction with Lincoln Blackledge of Stonebridge, sold the property. Daniel Walley and Philip Carter of PwC were appointed receivers and managers of Nera Developments Pty Ltd, a company formerly controlled by Merhi.
The Sydney’s based developer went into liquidation in winter owing the Australian Taxation Office at least $6 million, and after defaulting on a settlement agreed in 2019. In all, 23 Merhis companies went into liquidation, leaving a separate $16 million tax bill. The company’s director, Mark Merhi, left Australia.
Works at 29-31 Second Avenue had already commenced with basement car parking and first five levels of structure put together. The site has DA and six stage CC approval for 184 apartments and two retail shops over 20 levels, a development that Merhis had named Inspire, with gross floor area of 14,444 sqm.
Bidding commenced at $5 million for the 1,966 sqm site at 29-31 Second Avenue, and eight registered parties put forward 45 bids before the property was knocked down.
“A successful auction of this nature with multiple bidders competing is evidence that demand for mixed-use development sites is still strong despite the shifting market conditions, with the undersupply of apartment stock across Sydney fuelling this demand,” Meynell said.
“Due to the low levels of completions throughout 2020 and 2021 and with the affordability crisis impacting freehold dwelling prices, it’s no surprise there was fierce bidding between competing parties for this prized asset,” McConnell said. Blacktown is the largest LGA in NSW and the region is forecast to undertake strong economic and population growth that is underpinned by high levels of infrastructure investment in education, employment and healthcare.
Blackledge said demonstrating the value of works on site to date, plus the benefits of dealing with an arm’s length vendor allowed the agents to bring major buying groups to the auction room that typically would not have pursued an opportunity in this precinct.
