Campbelltown Square shopping centre placed into receivership over loan shortfall

Receivers have taken charge of the Campbelltown Square shopping complex in Sydney’s outer west, owned by a subsidiary of ASX-listed commercial property group Metroland Australia, which recently exited administration.

The shopping centre at 218-240 Queens Street near the Campbelltown train station was acquired by Metroland in August 2006 for $14.8 million and transferred to its wholly owned subsidiary Global Real Estate Assets Corporation in May 2007 with a loan provided by Colonial First State.

It covers 5,380 square metres of lettable area and was earning gross income of $1.2 million when acquired in 2006. Current real estate listings show two retail shops available for lease covering up to 1,065 square metres with no prices given.

It has been placed in the hands of receivers Michael Jones of Jones Partners by Perpetual Nominees Limited acting as custodian for Colonial First State Wholesale Pooled Mortgage Fund (CFS), the mortgagee for the shopping complex.

Metroland was placed in the hands of administrator David Levi at the end of August.

A creditors’ reported issued by Levi on September 26 shows that Metroland had a $10.4 million liability to Perpetual Nominees as custodians of CFS.

Conditional contracts of sale for the shopping centre were exchanged in August at a price of $9.025 million.

The sale of the complex, which is conditional on a subdivision currently in progress, will not satisfy in full the estimated claim of CFS, resulting in a short fall of $1.4 million should the sale proceed to settlement.

In its June 2012 full-year results, Metroland reported an impairment expense of $3.8 million in relation to the condition sale of the shopping centre.

This was to reflect the conditional exchange of contracts at less than the book value to meet the “property financiers repayment demand on the bank loan which is secured over the Campbell town property”.

Metroland reported a net loss of $10.8 million for the financial year ending June 30 and noted with regret that the property market “especially in the retail sector has further deteriorated thus reducing further the values of the assets of the company”.

Metroland exited administration on October 8 when it entered into a deed of company arrangement (DOCA) with the company placed back under the control of its directors.

This article first appeared on Property Observer.