The developer of a 100 unit complex in Sydney’s south-west which has been placed in receivership has left at least 14 investors wondering if they’ll have anything to show for their money after buying the apartments off the plan.
The Australian Financial Review’s story on the collapse the Hua Cheng International Holdings Group, which was developing Royal Plaza apartment block in Hurstville, was placed in receivership in July, reveals the complex financial web funding Sydney’s development boom as Australian lenders pull back and the lack of protections for buyers.
Hua Cheng International defaulted on a loan from Chinese-backed Super Vision Resources, registered in the British Virgin Island. Super Vision is a subsidiary of a Beijing-based state-owned Chinese financial services firm, and took control of 14 apartments sold off the plan, as well as 16 unsold apartments.
The buyers, mostly Mandarin speakers with Chinese names, spoke to the AFR anonymously saying they are concerned receiver Ernst & Young could sell their apartments to pay the lender. They bought the units in 2013 at a discount, but despite some being warned against the investment by lawyers went ahead with the deal before the property’s strata plan was registered.
They did not receive the title and are now looking at legal action.
Hua Cheng CEO Lawrence Xu spoke to the AFR saying he borrowed $35 million from Super Vision after being turned down by local banks.
The receiver and liquidator declined to comment.
You can read more at the AFR here