The sector has been saved from the debacle of The Woniora village in affluent Wahroonga (Sydney) by its acquisition by Matthew Chun and Steve Leske (pictured top & bottom). They tell us that they will use it to be the cornerstone of a boutique village operation focusing on the top end of the market in inner middle suburbs of Sydney and Melbourne.
You will recall that The Woniora was a two tower greenfield medium rise village commenced by Melbourne developer Becton and managed by its retirement arm and then Retirement Alliance. One tower of approximately 58 units was completed and sold when Becton was hit by the GFC and ultimately went into receivership in February last year. Being the owner, The Woniora was dragged into the receivership fallout as well.
Suncorp had a separate mortgage over the land that was to have the second tower which also included all the community facilities that the influential residents had been promised (and contracted) would be delivered. Suncorp put in a receiver to get the best price for the land. The residents went into overdrive to prevent the land being sold to a residential developer which would have killed the second tower plus left the 58 unit village commercially unviable with resident homes hard to sell.
They and the NSW and QLD state residents associations went into overdrive against Suncorp, with letters, video appeals and calls to their local member, the then premier Barry OFarrell (whose office is 750 metres down the road). The late Jan Pritchett, President of the RVRA, was the cool head that kept the media out, especially A Current Affair that was looking for a story.
Several village operators offered $4M when the Darryl Olney-Fraser of Mariner Corporation appeared and offered $7M which was accepted with a 5% deposit. Mariner promised they would complete the second tower and use The Woniora to build a new village operator group, pleasing the residents.
Mariner in the same week also paid a separate receiver a 5% deposit on Tea Gardens Hermitage village. Six weeks later marine failed to complete both purchases and ultimately failed both contracts, presumably losing both deposits worth $692,500.
During this fallout Suncorp quietly sold the land to a residential developer, killing the second tower forever for the residents.
The one constant in this journey were Chun and Leske. Chun was CEO of Becton and Leske CFO. The village residents report that they stayed with them throughout the ordeal, keeping them informed and maintain village services as best they could. Leske explains they wanted to get the village into a safe pair of hands. They have travelled back and forth from Melbourne for 18 months gratis. Reflecting this goodwill, they regard Chun and Leskes purchase as a good outcome.
Leske reports they negotiated compensation to existing residents for the loss of facilities promised. He and Chun are now investing in upgrading the common areas, the gym and dining areas plus building a 20 seat Gold Star cinema.
He believes the village will now work financially. They are about to settle on their first rollover with a 26% DMF over 7 years. Kerry Lehmans Brand Parters out of Adelaide have been commissioned to market The Woniora and develop the new operators market positioning.
Chun and Leske funded the project themselves.
(Olney-Fraser resigned from Mariner in August. In FY14 Mariner borrowed $1M and made a net loss for the year of $972K with net liabilities of $1.8M. They started the year with $10K cash in the bank an ended the year with $14K).
