New Zealand's first crowd-funded commercial property development to fold before it's begun

The bare site, on the main street of Lyttelton in Christchurch, was to have held a $NZ15 million [$13.9 million] building with apartments, co-living spaces, hospitality outlets and a wellness centre.

Two weeks after deciding to pull the plug, the owners have put the land up for sale, with offers wanted by a July 30 deadline. Resource consent for the development comes with the 973-square-metre site.

Project lead Camia Young said in an email to shareholders in Collett’s Corner Ltd that they hope to negotiate a sale with potential purchasers in August.

They then plan to distribute proceeds after settling bills, closing contracts and wrapping up the company.

Advertising for the land describes it as a “developer’s dream”.

“With resource consent granted in March 2020 for a four-storey mixed-use building, you could be building within six months,” it says.

Shareholders were told in May that increased risks and rising costs meant they would get back about 75 per cent of their investment by stopping immediately and selling the land.

If the project folded later in the year, they could lose half their investment, they were told.

Board members made the decision to halt the project after asking shareholders to vote on its future.

As well as Young, prominent shareholders include her company Ohu Development, former Christchurch City councillor Raf Manji, and economist Shamubeel Eaqub.

Crowdfunding to launch the development brought in more than $NZ1 million in 2019 and 2020, with shares costing $NZ120 each.

Eight of out 20 apartments were pre-sold by May, with prices ranging from $NZ425,000 to $NZ735,000.

The building’s ground floor and basement had been leased to Ūkaipō, a Māori wellness sanctuary start-up business that had been seeking practitioners and a guarantor.

Construction was meant to begin in early 2022 and be finished in 2023.