New Zealand’s first crowd-funded commercial property development to fold before it’s begun

It was the website that had hopes for New Zealand’s first crowdfunded commercial real estate development, a form of “compassionate capitalism” aimed at sharing wealth.

But after the project didn’t work out, the more than 600 owners of the Collett’s Corner project put their land up for sale.

The bare lot on Lyttelton Main Street in Christchurch was said to be NZ $ 15 million [$13.9 million] Buildings with apartments, co-living areas, restaurants and a wellness center.

Two weeks after the decision to unplug the property, the owners have put the land up for sale, with offers until July 30th. The resource permit for the development is supplied with the 973 square foot site.

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Project manager Camia Young said in an email to Collett’s Corner Ltd shareholders that they hope to negotiate a sale with potential buyers in August.

They then plan to distribute the proceeds after the bills have been settled, contracts signed and the company closed.

The advertisement for the property describes it as a “developer dream”.

“With a resource permit issued in March 2020 for a four-story, mixed-use building, you could build in six months,” it says.

Shareholders were told in May that due to increased risks and rising costs, they would get about 75 percent of their investment back by stopping immediately and selling the land.

If the project failed later in the year, they could lose half of their investment, they were told.

The board members made the decision to stop the project after asking shareholders to vote on its future.

Prominent shareholders include Young, her company Ohu Development, former Christchurch City Councilor Raf Manji, and economist Shamubeel Eaqub.

Crowdfunding at the start of development raised more than NZ $ 1 million in 2019 and 2020, with shares costing NZD 120 each.

Eight out of 20 apartments were pre-sold by May, with prices between NZD 425,000 and NZD 735,000.

The building’s ground floor and basement were rented to Ūkaipō, a Māori wellness sanctuary start-up company that was looking for practitioners and a sponsor.

Construction should begin in early 2022 and be completed in 2023.

This article first appeared on stuff.co.nz. Read the original here.

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