Massive loss plunges property developer Metroland into administration as values continue to fall
Monday, September 3, 2012/
Listed real estate developer Metroland Australia appointed an administrator last Friday, just days after delivering a disastrous financial report in which its full year loss multiplied by nearly 900%.
The business warned its retail property values had been declining and that it was continuing to negotiate with financiers. It has been heavily exposed to the retail space, where poor performances among SMEs have led to declining values.
It is yet another sign of strain in the construction and property sectors, which have been suffering under falling values since the financial crisis. Earlier this year, Metroland offloaded a 25% stake in the Greenway SupaCentre in Sydney’s west for just $5 million, after buying it for $18 million in 2003.
The company announced David Levi of Levi Consulting had been appointed as an administrator with the administration applying only to the company, and not any of its subsidiaries.
David Levi was also contacted this morning but unable to reply prior to publication.
The company’s most recent financial results show a troubling situation.
Metroland’s loss skyrocketed 897% to $10.6 million. At the time, it said the property market – especially in the retail sector – had continued to deteriorate, resulting in lower asset values.
The company’s liabilities exceed its assets by $2.6 million, it said. During the previous year it incurred a $6.4 million impairment from investment properties, partly due to the SupaCentre investment and a $3.8 million charge relating to a property in Campbelltown Square.
“The ongoing operation of the consolidated entity is dependent upon the continued support by the financier and the ability of the directors to raise further capital,” it said