Progressive buys 'Sohole' site

Supermarket owner in condition deal to buy massive hole in the ground.

It took more than three years and two marketing campaigns but Soho Square, one of Ponsonby’s biggest eyesores has finally been conditionally sold to Progressive Enterprises, owner of the Foodtown, Countdown and Woolworths supermarket chains.

NBR can’t report the price – yet - because one of the lawyers involved has pointlessly instructed media communications officials to try to keep it secret. However it will be revealed as soon as the sale is registered.

Regardless, real estate sources suggest the price for the 1.3ha cleared “Sohole” site will be nowhere near the touted $250 million completion value of the original development plan nor even approaching the amount owed to funders. Most pundits put the current value at around $20 million.

This means that the first mortgagee, Fortress Credit Corporation (Australia) will recover most of its $23.1 million loan but second security holder Strategic Finance, owed $69 million, will receive nothing.

Fortress appointed Grant Thornton receiver Tim Downes in November 2009 after default by developer Layne Kells’ company, Ponsonby Mall Trust, which acquired the former DYC vinegar factory site in 2004.

Real estate broker Bruce Whillans of Ray White advertised the sale by tender and managed the process. Six bids were received. He said the sale demonstrated that confidence was returning to the development sector.

In a prepared statement, Progressive Enterprises general manager of property, Adrian Walker, expressed excitement about the opportunity to develop the site and said plans would be forthcoming soon.

They are unlikely to involve the “urban village” originally envisaged by Mr Kells but local residents will be pleased at any moves to develop the site that has attracted more water and insect life than commercial interest since the property crash after 2008.

Receiver, Tim Downes of Grant Thornton, said the sale price was a fair reflection of the current market.

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