Race to bag stalled DeTrafford site heats up
A handful of companies have submitted bids to acquire the troubled developer’s Gallery Gardens plot in Manchester, which has planning permission for a 366-apartment scheme.
The latest update from BDO, the administrator for the two DeTrafford vehicles behind the Castlefield project, states that five bids from unnamed developers have been received.
While details of the bidders were not provided, the opportunity is likely to be of interest to several developers already active in Manchester, given that it benefits from planning permission.
The land is estimated to be worth between £1.5m and £4m and is saddled with various debts.
Lender Daiwa is owed £25.1m by the two SPVs – £2.7m in the form of a direct loan to facilitate the Gallery Gardens project and £22.4m by way of cross guarantees against other DeTrafford projects.
Another lender, Maslow, is owed £11m by the Gallery Gardens vehicles by way of cross guarantees against other DeTrafford projects.
Unsecured creditors are owed £7.2m by the two companies, the majority of which is intercompany debt.
More than 80 of the flats have been sold off-plan and £2.1m of deposits has been paid, according to BDO. Around 70 of the purchasers hold unilateral notices.
The five bidders want to acquire DeTrafford’s leasehold and freehold interests in the site.
The company’s ownership extends to the plot where one of the blocks, comprising 195 apartments, would have been constructed.
Gallery Gardens Block A Limited owns a 44-year leasehold on part of the site. DeTrafford Regiment Limited owns the freehold on the remainder.
Manchester City Council owns the freehold to the other half of the scheme, earmarked for a 171-flat block.
DeTrafford had signed a 150-year development agreement with Manchester City Council to bring the project forward. However, this agreement has now expired, according to BDO.
BDO is liaising with the city council about the potential sale of the site.
Roger Hannah is leading the sales process and Daiwa, the first-ranked secured creditor, is considering the bids, according to BDO’s report.
The two vehicles behind Gallery Gardens are among a glut of DeTrafford entities to collapse in recent months.
No1 Castlefield is another troubled DeTrafford project. Credit: via planning documents
Most recently, the collapse of DeTrafford No1 Castlefield was the seventh domino in director Gary Jackson’s DeTrafford empire to fall. That vehicle was behind a 420-home Manchester development.
Planning consent for the scheme was granted in 2017 but no work has taken place in the last six years.
More than 300 apartments within the project have been sold off plan to investors who are owed in excess of £13m for unbuilt properties.
In total, No1 Castlefield, the most indebted of the DeTraffoird vehicles to collapse, owes £50m to creditors.
Just a few days before the collapse of Gallery Gardens, the vehicle behind the developer’s completed 166-apartment Sky Gardens was put into administration.
Last August, Place North West revealed that the company behind Wavelength, DeTrafford’s proposed 421-home development at Salford Quays, had gone into administration.
Creditors on this scheme, which has never been built, are owed almost £11m, according to a report by administrator Kroll.
In September, BDO was appointed by lender Maslow as administrator to DeTrafford St Georges Gardens, the vehicle behind the completed 138-apartment development of the same name.
The following month, Maslow once again instructed BDO, this time over DeTrafford City Gardens, the company behind a 109-flat development.
In December, a report by BDO on City Gardens and St George’s Gardens revealed the companies owed a combined £26m to creditors.
The collapse of the Sky Gardens vehicle means the companies behind three of the four completed blocks within the Castlefield masterplan are in administration. Roof Gardens is not in administration.
