Friday, December 24, 2010

The Oracle - Big Losses

INVESTORS who bought into the $850 million Oracle Broadbeach development on the Gold Coast have taken losses of up to $1m.

Receivers of the company behind the failed project are vowing to pursue legal action over the unsettled 200-odd apartments in the two-tower complex, once promoted by author and former model Tara Moss.

One Oracle apartment owner said he was aware of people who had settled on apartments located on the 44th floor for $3.5m and had since sold them for $2.5m.

Michael Kuhne said his late wife bought one of the three-bedroom Broadbeach apartments off the plan for $2.4m, and it was yet to settle.

He tried to sell the property last year, but there were no buyers. "I am trying to get rid of it and can't," he said.

KordaMentha announced on Thursday night that South Sky Investments, the Niecon-related company behind the Oracle, had been placed into voluntary receivership by director Michael Nikiforides. The Broadbeach project was highly leveraged with several financiers, including the National Australia Bank, sources said.

Queensland property analyst Bill Morris said the number of new high-rise apartments for sale on the Gold Coast had almost halved to about 750 in the past year, and the volume of sales for the three months to November was the lowest level since 1981.

"Things improved for a while, but the Gold Coast in particular has died. There is a general expectation in the market that prices could still fall," he said.

The two 40- and 50-storey Oracle towers have 505 apartments, a five-star hotel, shops and commercial office space and are among the tallest on the Gold Coast.

It is the second Niecon-related venture to fail this month after the company linked to the Nirvana By The Sea residential Gold Coast project, Kirra Beachfront Investments, was handed over to its financier.

Attention is turning to other luxury apartment towers on the Gold Coast, such as Juniper's Soul, a Surfers Paradise luxury apartment project, which settles at the end of next year, and the Hilton Surfers Paradise Hotel & Residences, which is also settling next year.

Source: The Australian

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