St Laurence to the rescue

Wellington-based St Laurence Group has been called on to rescue two struggling property bond investments in Auckland.

One is the Victoria Park Market property which was originally put together in the mid-1990s by interests formally associated with Kiwi Income Property Trust, and the second is the $5.4 million Viaduct Carpark junk bond which was associated with the Hartner Group.

Investors in the Victoria Park Market (VPM) have taken a bath over the years as the property hasn't performed, it has failed to produce the income expected and consequently its value has fallen significantly.

VPM was originally valued at around $14 million, but its value had now fallen to $6 million, St Laurence Group managing director Kevin Podmore says.

Consequently net asset backing for the bonds has fallen from $1 to 17c.

Investors asked St Laurence to take over the management of the property earlier this year.

Podmore says a St Laurence subsidiary, Cascara Group, is now looking after the property and doing a full review of it to work out areas of cost savings and its redevelopment potential.

So far it has identified potential cost savings/incremental revenue of about $200,000 annually.

Podmore says his group agreed to take over managing VPM as a service to investor and advisers, some of whom are probably existing St Laurence Group clients.

"We are not going to get rich out of doing it," he says.

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