High-profile Gold Coast project up for sale after HMC foreclosure
A high-profile Gold Coast development site has ground to a halt after its owner handed back the keys to lenders – which include HMC Capital – just seven months after acquiring the property.
An entity controlled by Growth Point Capital chief executive David Schuh bought the site at 99 and 101 Old Burleigh Road in Broadbeach for $24 million in July last year, but lost control of the asset after defaulting on multiple loans.
The collapse comes amid a broader shift in Australia’s lending landscape, where private credit funds are playing an increasingly dominant role.
While private credit operators offer faster access to capital, the higher borrowing costs of non-bank lenders has led to a growing number of asset sales due to developers not being able to repay the higher cost even if the project’s fundamentals are sound.
In the case of the Broadbeach site, Schuh had financed the deal through loans from private credit operators HMC Private Credit and Vance Finance, and vendor finance from Bam Property, a vehicle led by Brisbane-based Marco Ferro, who has developed major residential towers across Queensland.
But Schuh lost control of the 1300-square-metre development site in April when his company, 99 Old Burleigh Pty Ltd, defaulted on a loan it owed to Vance Finance, which then appointed receivers.
A month later, HMC Private Credit, which holds the senior debt, also tipped the company into receivership and appointed FTI Consulting’s Kelly Trenfield and John Park.
‘Confident of full recovery’
HMC Private Credit head Craig Schloeffel said the senior lender tipped the company into receivership to have its own appointed receivers run the default process, rather than those appointed by Vance Finance.
“HMC appointed FTI Consulting as receiver in order to maintain control of sale process and are confident of full recovery of the loan from proceeds of sale,” Schloeffel said.
Sources familiar with the asset said the loan facility owed to HMC Private Credit was worth about $15 million.
The site is now on the market, and the FTI Consulting receivers have appointed Colliers’ Steven King, Troy Linnane and Jackson Robinson, and Sutherland Projects’ Julian Sutherland to run the sales campaign.
The site already has development approval, allowing developers to build 59 apartments, including 36 with three-bedroom layouts, 22 with four bedrooms, and a five-bedroom penthouse with a home theatre, office and four bathrooms.
“Expressions of interest pricing will be determined by the market, but enquiry levels have been encouraging,” Trenfield said. “Sale proceeds will be used to repay loans based on their priority, with HMC Capital holding the senior position.”
HMC entered the private credit market in May last year through its $127.5 million acquisition of Payton Capital. The division, renamed as HMC Private Credit at the start of this month, has been expanding its footprint in the mid-market lending space, deploying capital into residential and commercial development projects nationwide.
The Broadbeach site was previously owned by Ferro, who had planned a 46-storey residential tower before scrapping the proposal and offloading the site to Schuh last year.
The expressions of interest process ends next month.
