Shock as Pegasus Town falters

Image from www.pegasustown.com

Pegasus Town’s debt-defying run has come to an end with the receivership of the company.

In February this year, managing director and shareholder Bob Robertson, told NBR ONLINE that sales at the development north of Christchurch had taken off again, and the development of commercial infrastructure was back on the horizon.

Mr Robertson had anticipated a surge of buying after offering 130 “subsidies” of between $30,000 and $50,000, amounting to $5 million.

The discounts have been made possible because Pegasus has bought back loans it had from troubled funder BOSI, owned by Lloyds, Mr Robertson said in February.

He said the repurchase was part of a recent deal when a partnership involving Goldman Sachs Group, and Brookfield Asset Management acquired 22 loans worth about $1.5 billion over various developments.

They incuded Pegasus Town, hotels at Kawarau, Queenstown developed by bankrupt Nigel McKenna, HSBC Tower on Auckland’s Queen St, development land at Albany on the North Shore, a Wellington hotel and properties developed by bankrupt Wellington developer Terry Serepisos.

In February, Mr Robertson said the deal discounted the loans to 34c in the dollar and he negotiated to buy the Pagasus Town portion at less than half the original value.

“There’s been a bit of interest in funders helping Christchurch people, as long as it works for them, too, of course. We got a windfall so we’re prepared to allocate some of that.”

But today, receiver Simon Thorne took control of the company after Mr Robertson was unable to finance the purchase of the discounted loans.

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70 Comments & Questions

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According to Bob Robertson on the Stuff website, no one will be left out of pocket, how does that work, with only 10% of sections built on and a lot of the facilities the plan proposed not built either, this could be a very big ghost town?

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Because what's been built on and what's been sold are completely different things. The large majority of sections at Pegasus without a house have been sold, and new houses are starting every week.

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Only 10% built on? Clearly you haven't been to Pegasus for a very long time (if ever).....

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PR cannot change the inevitable.

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Christchurch is clearly suffering significant depopulation. The idea that it is a bonanza for subdividers is wrong. Further, Pegasus is too far out to be thought of as Christchurch and have you ever been there on a typical Christchurch day in a howling easterly?

Auckland is going to grow.

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Just like Jacks Point - only those who do not know Queenstown would be mad and/or dumb enough to buy a property there to live in. It's chillingly freezing cold and miserable for at least 8 months of the year!

What is it with South Island developers? Are they so bereft of ideas that they think they can change Mother Nature?

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Absolute rubbish. I live at Jacks and it's a fantastic place to live. Love sitting in the afternoon sun looking across at Queenstown Hill in the shade at 3pm.

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You are one of 35 residents there out of the 1,500 sections available?

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They're clearly developing for a market that aren't as soft and wimpish as you!

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Hehe ... George Kerr & John Darby must wish that there are more people who were prepared to pay over $400,000 per section.

There are sections there now for sale at under$200,000 and still no takers.

Ouch!

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75 houses here either under construction or starting in the next 6 months. And there are 600 sections, not 1500. You don't know what you're talking about!

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Yawn.

29 existing houses for sale.

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Again, rubbish. Most of the houses for sale have multiple listings with agents so there are nowhere near 29 for sale. I suggest you just come out to Jacks and have a look - it's going to be another beautiful day here!

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Yes, dear Jacks Point resident.

Do enjoy that bone chilling Antarctica wind picking up moisture over the lake and whistling over Jacks Point and the cold Remarkables freezing air descending down the mountains onto Jacks Point.

I was the mortgagee auction of some of the sections and remember John Darby saying that those section prices were not indicative of underlying prices. Oops, they are now for sale at under $200,000 and all offers will be considered!

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You're an idiot. You think that as someone who actually lives there, I don't know what it's like to live there? By the way, there have been 4 house sales in the last 4 weeks over $900k and 3 builders at least building their own houses there.

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Been at Jacks Point so no need for your real estate agent commentary,

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Nobody wanted to build in cloneville(Pegasus) before the quakes anyway, so I wouldn't put in down to significant depopulation.

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Bob has an interesting history of failed projects !

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Bob Robertson is the Managing Director of Infinity Investment Group, which is the majority shareholder of Riverstone Holdings Ltd (RHL) - the company trying to get a concession from DOC to build a private-access monorail built over conservation wilderness, to the site of its hotel operation in Te Anau Downs. Bob Robertson is also the CEO of RHL (see http://www.infinitywanaka.com/about-us.html and http://www.fiordlandlink.com/about.htm)

Question: Can the $150 million or thereabouts monorail project really be financed by RHL if they are so closely linked, through Mr. Robertson's key management roles, to the Pegasus company that is just now going into receivership?

With all these companies owning other companies it does get a bit confusing. I suppose Mr. Robertson could answer the above question.

Another question for Mr. Roberston: Is he able to make a public promise that, if RHL does get the monorail concession from DOC, that RHL will be the ones to build it, and the concession will not be sold off first to another developer?

Until that question is answered, we are left wondering if the 'Fiordland Link Experience' is no more than an attempt to make a quick buck by gaining and then flipping a paper concession.

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80% of the buyers in Pegasus were South Koreans who headed for the hills , walked away from deposits etc after the 2nd earthquake.

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What a load of rubbish, research your facts before you comment.

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Yes, heard the same thing.

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sorry guys, I work there and I know the comment isn't true

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You might want to get your fact right PH before you start commenting on here...

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Are the money lenders concerned that New Zealand is about to have a property meltdown.
The Christchurch property market is over priced at present.Just like America in 2008
There are too many new subdivisions with inflated land valves
When the Government buys the land in the CBD below valuation it will force land prices down.this will flow right through the property market.
People are going to loose equity in residential and commercials properties and the banks will call up the mortgages.
First the finance companies now the property market.Wake up Kiwi

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The Govt will pay a price representative of current ( very poor) valuation for the CBD land it requisitions, rather than the generous 2007 CV it offered to residential red zoners. Such is the nature of commercial property.
However, by parceling up full block lots, and limiting the CBD's zone within the fabulous frame, the Gummint will make windfall profits from its stirling efforts.

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As far as I can see, Christchurch is going to experience a slow recovery. Development is based on demand, and the ability to pay.

When the shaking stops, perhaps Christchurch should put their hand up for the next Commonwealth Games. Why not use all there new infrastructure requirements as a catalyst to bring Tourists back to Christchurch.

Why hasnt anyone else thought of this by now? It would bring confidence to local investors/developers, who are otherwise investing elsewhere.

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good idea

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Message to dorklanders - I live in Pegasus - come south and see Pegasus for yourselves. If worse case scenario, Pegasus remained as is and developed no further , it is still a kick a*se beautiful place to live.!!
It currently has loads more going for it than a plain old sub division. New houses going up every day!

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Totally agree. How many other subdivisions have a lake, golf course, great restaurant/cafe/bar, tennis courts, walking/biking tracks, not to mention the beach in easy walking distance???? We are currently building there and as Pauline says, if nothing else was developed we'd still be incredibly happy to soon be living there!

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With those underwater fault lines in Pegasus Bay, I'd recommend building a pole house to let the tsunami pass through!

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but that is the same for any property on the eastern seaboard

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I have lived on the edge of Pegasus since 1999 , it's s cheap arse crappy subdivision, known as peanut. Fools who purchased here are going to be even bigger losers shortly. Golf course won't be operating in six months, no school, no shops, just your average Detroit slum

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Quite correct, pegasus just a cheap town on sand, the compaction they crow about was only a vibrating roller, like landfills use. If they ever get an earthquake out there the whole place will become a liquefaction pond

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As somebody who financed the sewerage for the place..you are correct. The whole thing is sand. nightmare waiting to happen.

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Well, do you not hink it would have happened already if it were going to? It has already experienced the same seismic activity as everywhere else in the area and there hasn't been any liquefaction or earthquake damage. Around 85% has been designated TC2 the rest is still awaiting title or is within 200m of water. The same criteria as elsewhere in Waimakariri

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but you weren't averse to making money out of it mapleham?

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Obviously you were one of original haters of pegasus you have a huge bee in your bonnet could you possibly be the moaner that lives a little closer to pegasus than you would have people believe if so we've all heard your stories. Mabe not but you definitely sound like someone who's a little bit to bitter for your own good.

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I understand why people defend their poor decisions. Nobody likes to spend hundreds of thousands only to find they've purchased a lemon, sorry for you

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Rubbish! I was in Pegasus when the Feb earthquake struck. I was almost knocked off my feet by the force of it and the building I was in shook like crazy. There was no liquefaction, the building was completely undamaged and the 'vibrating roller' that you speak of was used extensively in Dubai to create their new landfill islands.
Nor do I regard $1,500,000 properties as 'cheap'!

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#23 Maple Ham..What a load of rubbish. Get your facts right!

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Facts are correct, you idiots that bought there bought a dream that will never be delivered. There is a good reason why there was no housing on the Pegasus site, if ecan wasn't so dis functional it would still be in pine trees, the only practical use for sand

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Must agree with jennydon, you really do not know what you are talking about mapleham. I think you are just repeating hearsay. I reckon the 600 or so people who already live there would disagree with you, too. Geotech reports don't lie.

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Facts are correct, you idiots that bought there bought a dream that will never be delivered. There is a good reason why there was no housing on the Pegasus site, if ecan wasn't so dis functional it would still be in pine trees, the only practical use for sand

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I suggest you come and take a look at the latest earthworks, the latest building phase. Perhaps you people who are so busy knocking Pegasus are the ones who use the lake for kayaking etc. Or perhaps the lifestyle is one you just can't afford and therefore if you can't have it... you knock it.

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As an engineer who's some involvement in the Pegasus development, I can verify beyond doubt your statements (and many of the others above) are rubbish.

1. Yes, it's built on sand - good clean sand, generally not the fine silts that liquefy.

2. With material removed from the lake and placed on the surrounding land to raise it, all sections sit on high ground above flood levels on about 2m of well compacted engineered fill

3. As a result of the above, houses at Pegasus are generally at least 2m above the groundwater table. Most of the area east of the Chch CBD and all of the areas that suffered bad liquefaction are only about 1m above the groundwater level.

4. Specialist vibro-compaction and vibro-replacement was also undertaken around the lake edge (well prior to the 1st earthquake) to further protect the area from possible lateral spreading.

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I heard Housing New Zealand are going to purchase a lot of sections there and build a Otara of the south. Charming.

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Pegasus has weathered a lot of 'I heards' over the years, none of which have been true, including the Housing NZ rumour.

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HNZ couldn't afford the sections there!! More likely Rolleston, I hear the latest name for that is Rollenui!!

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As an engineer who worked at Pegasus you will be aware it was known as a "t*rd" subdivision. Ie; like a t*rd shiny on the outside, but scratch it and it's sh@t underneath. If it was so great why do the houses have to have vastly stronger foundations after the geo testing, pleased you didn't work on my house

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