DID BANK CRASH UNIT MARKET? Buyers Invested All Their Super; Fire Sale of Peppers Units Will Cost Owners Millions

Fraser Coast Chronicle (Hervey Bay, Australia), May 14, 2010 | Go to article overview

DID BANK CRASH UNIT MARKET? Buyers Invested All Their Super; Fire Sale of Peppers Units Will Cost Owners Millions


THE COMMONWEALTH Bank has devalued units in Hervey Bay by millions of dollars after allowing PPB Receivers to sell off luxury units at the Peppers Resort for below the value they cost to build.

That's the claim of Graham Allen, the man who designed and built the $80 million ground-breaking development in 2007.

Mr Allen is currently involved in a bitter dispute with the bank over a $17 million debt surrounding Peppers, but he insists his fight with the bank is not why he has gone public with his criticism.

The bank moved on Mr Allen around six months ago when he continually defaulted on a $17 million loan he had with it.

It then appointed PPB Receivers to sell up his assets at Peppers to recover the debt. Those assets consisted of 21 prime units, five of which were penthouses, the management rights to Peppers and three commercial retail areas, the health club and gym and the convention centre.

In its first public move PPB listed an auction sale on the units and brought in local real estate agents Ray White.

The sale attracted huge interest, but was noted more for the low bids that all failed to meet reserve prices.

In negotiations that followed with the highest bidders, contracts on 10 of the units, including the five penthouses, were signed off on by PPB and then the bank.

PPB manager Grant Sparks refuted the claim that the units were let go at aany pricea, saying his company had obtained independent valuations on the units before the auction and that the valuations had been updated soon after the failed auction.

"The Corporations Act ensures that we obtain a fair market value for anything we sell off and that's what we did here," he said.

While official figures on what was paid for the units have not been released Mr Allen claims he has a avery gooda idea of what money changed hands. …

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