Overview
The Cheng & Lok Company Pty Ltd was the developer behind a mixed-use residential project at 7 Sloane Street, Maribyrnong VIC, consisting of 36 residential apartments and one commercial unit across three levels, with a single basement car park. The development also incorporated the partial retention of an existing heritage-listed dwelling on the site.
The secured creditor had advanced approximately $13.6 million to the project. At the point of Olvera's appointment, construction was approximately 80% complete, 16 pre-sales totalling approximately $8.2 million were in place, and completion had been targeted for late January 2024. Pre-appointment disputes of approximately $1 million between the developer and the builder had created significant operational tension and placed the project's timeline and value at risk.
Challenges
- Construction Stalled by Dispute: Pre-appointment conflict between the developer and the builder had disrupted progress on an already partially complete development, requiring immediate intervention to stabilise site operations and restore working relationships with key contractors and consultants.
- Heritage Constraints: The partial retention of a heritage-listed structure on site added a layer of regulatory and design complexity to the completion works, requiring careful management alongside standard construction oversight.
- Funding and Finance Gaps: Completing the development required the implementation of Receiver funding and the exploration of alternative finance options to bridge the gap between the project's current state and a saleable outcome.
- Section 420A Obligations: As Receivers, all sale and marketing activity needed to be conducted in strict compliance with section 420A of the Corporations Act 2001, which requires that property not be sold at less than market value, adding process discipline to every step of the sales campaign.
- Pre-Sale Management: With 16 pre-sales already in place at appointment, protecting those contracts throughout the completion period while preparing the remaining stock for market was a key priority.
Our Approach
Following appointment, the Receivers moved quickly to stabilise the project through statutory notifications, insurance and security reviews, and direct engagement with key consultants to assess risks and costs to complete. This initial phase established a clear picture of what was required to bring the development to a saleable condition.
The Receivers implemented a funding structure to recommence construction and explored alternative finance options to support project completion. We oversaw all remaining construction activity, liaising closely with the builder, project manager, and specialist consultants to ensure timely delivery, quality control, and resolution of on-site issues.
In parallel, we directed the marketing and sale preparation process, engaging agents, coordinating information memorandum and campaign materials, and ensuring full compliance with section 420A of the Corporations Act throughout. We managed sale execution and settlement end-to-end, reviewing offers, negotiating terms, finalising contracts, and overseeing settlement adjustments and repayment processes.
Results
Construction was completed and all units were sold in one line, achieving a strong return for the secured creditor and enabling full repayment of the approximately $13.6 million advanced to the project.
The engagement delivered a clean resolution to a project that had been materially disrupted by pre-appointment disputes, transforming a stalled development into a fully realised asset sale within an 18-month receivership period.
Key Drivers of Success
- Swift stabilisation of site operations and early engagement with contractors and consultants restored project momentum and contained cost and timeline risk from the outset.
- Disciplined oversight of the construction completion phase, combined with rigorous compliance with section 420A obligations, protected the integrity of the sale process and maximised recoverable value for the secured creditor.
- A coordinated marketing and sale execution strategy, executed in one line, delivered a clean and efficient exit from a complex development asset.
