Failed lender Banksia has taken a big hit on loans it extended to collapsed developer Brunswick Retail Investment Pty, likely recouping only a portion of what was owed following the mortgagee sale of 10 small commercial assets last week.
Brunswick Retail Investment, which developed the mixed-use Anstey Square project in Brunswick, was placed in liquidation in late 2011 owing $51.7 million to creditors that include Banksia, builders Hickory Group and the Tax Office.
The mortgagee sale involved five retail shops and five office suites in the commercial concourse of the Sydney Road residential tower, with all 10 selling at auction for a combined value of $2.879 million.
"Everything sold for above reserve," said Jones Lang LaSalle agent Matthieu Lucas.
But a source familiar with Brunswick Retail Investment's financials said Banksia likely took a steep loss on the properties, with some fetching prices up to 73 per cent below their original valuation.
Documents obtained by BusinessDay show that the 10 properties were valued at $7.05 million in late 2010, before Banksia Mortgages Ltd extended the loans.
Banksia declined to comment. Permanent Custodians Limited, which acted on behalf of Banksia in managing the loans, is owed more than $4.23 million, according to documents filed with the Australian Securities and Investments Commission.
Liquidators Rodgers Reidy report $37.2 million is being sought by three secured creditors and $14.4 million by 10 unsecured creditors.
The failure of Brunswick Retail Investment is one in a series of financial blows for bankrupt developer Warren Alfred Thompson, who has had 17 companies that he controlled placed in external administration since 2010.
Mr Thompson disputed the $51.7 million amount being claimed by creditors. "I don't think that company would ever have had the capacity to borrow that much money," he told BusinessDay.
He declined to comment on the circumstances of the company's failure.
Paul Castran, chief executive of estate agency Castran Gilbert, said their group was owed about $180,000 for marketing the residential component of Anstey Square. "It was a good project. We sold the units well and they all settled - then this happens. It's a very big mystery," Mr Castran said.
Liquidators Rodgers Reidy, who did not respond to requests for comment, has already sold four small retail and office spaces in Anstey Square for $3.2 million - also below their valuations - which makes up the bulk of money recouped in the liquidation to date.
Brunswick Retail Investment bought the future site of Anstey Square for $7.15 million in 2006 from Trackside Pty, owned by drug king-pin Tony Mokbel.