Apartment king Harry Triguboff has snapped up a $50 million Castle Hill development site with approvals in place for almost 300 units as receivership and mortgagee-in-possession sales flood the western Sydney market following local developer collapses and as rising costs and interest rates make many projects unfeasible.
Ray White Commercial Western Sydney managing director Peter Vines said 13 per cent of the agency’s current listings were mortgagee in possession sales (sites repossessed by receivers on behalf of secured lenders). This compared with almost none a year ago.
The Castle Hill site scooped up by Meriton has a permit for seven buildings and almost 300 apartments. 
Mr Vines attributed this surge to a “perfect storm” of soaring construction costs, a wave of builders going broke, increasing interest rates, record high taxes, the role of the NSW building commissioner in uncovering shonky projects and a notable slowdown in the economy.
“We’re seeing more stress in the market with land typically being the first place where it plays out,” he told The Australian Financial Review.
“Developers have borrowed at higher interest rates and are struggling to get planning permits. Off-the-plan sales are hard and the cost of construction has increased exponentially. Holding costs just keep building and profits are disappearing.”
Some sites being sold by receivers included those tied to collapsed developers such as Toplace, Dyldam and Kingdom Developments, Mr Vines said.
Receivership sites on the market include properties in Wentworthville, Grantham Farm, Hurstville, Schofields, Parramatta and Box Hill.
The Financial Review foreshadowed this trend in March when it revealed there had been a sharp rise in the number of development sites being put up for sale as developers came under pressure from their lenders.
The 1.24-hectare site at 24-34 Fishburn Crescent and 2-12 Sexton Avenue in Castle Hill snapped up by Mr Triguboff’s Meriton Group was previously a seven-tower project marketed as Castle Island by Hong Kong development giant KWG Group.
In May, insolvency specialists at KordaMentha were appointed receivers and managers of the local KWG entity that owned the site by secured lender Dragons 519 Limited, a Cayman Islands-based company.
A statutory report filed with the Australian Securities and Investments Commission shows a $59.5 million mortgage on the property and $57.3 million owed to Dragons 519 Limited.
A spokesman for Meriton declined to comment on its latest acquisition, which was brokered by Knight Frank’s Mark Litwin, Grant Bulpett and Dominic Ong.
It is not the first time Mr Triguboff’s Meriton has swooped on receivership sales. In 2021, Meriton paid $68.5 million for a 2.8-hectare former Dyldam site in Carlingford.
Mr Litwin said he could not comment on the Castle Hill deal but like Ray White’s Mr Vines, he noted an increase in receivership sales for sites in metropolitan Sydney.
“These sales are focused on sites with developer-specific strategies that haven’t been able to withstand the recent rapid macro changes, namely interest rate rises,” Mr Litwin said.
However, he said the increase in receivership sales was not an indicator that the market has crashed. That point was also made by Mr Vines, who highlighted that good sites with potential were still selling at strong prices.
This trend was evidenced by the recent sale of Crown Group’s Mastery site in inner Sydney to Aware Super for $121 million.
“Fundamentally, Sydney is still in the throes of a serious dwelling supply shortage and needs stock across multiple sectors including ownership, rental, seniors and students,” Mr Litwin said.
“The receivership sales process helps to move development opportunities in the hands of a more contemporary strategy that can deliver an outcome sooner.”
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