Wavelength investors owed £10.8m could be left out of pocket
The DeTrafford vehicle behind plans to build a 421-apartment scheme at Salford Quays collapsed with liabilities totalling £15m, the majority of which is owed to investors who bought apartments off-plan.
A report published on Companies House by administrator Kroll states that a distribution is likely to be available for some of the investors, owed a combined £10.8m.
However, “this may not be equivalent to the value of their initial investment”, the report states.
The amount that investors will receive is dependent on how much the Wavelength site sells for. A total of 299 apartments have been sold off-plan, with deposits of between 10% and 30% paid.
Some of the deposits may be covered by an NHBC insurance product, according to the report.
The report states: “The joint administrators are currently taking steps to obtain relevant information in respect of these deposits in order to undertake a review and take legal advice on the correct position and treatment of such monies or investors.”
Another £4m is owed to lender Whitecraig Limited, which holds a fixed charge over the site. Whitecraig appointed Kroll as administrator on 17 August after DeTrafford fell behind on its debt repayments.
At the time, Kroll blamed project delays caused by the pandemic for the company’s collapse.
Kroll is now seeking a buyer for the site and recently applied to demolish Navigation House, which sits on the Wavelength site, to prevent the planning permission from expiring.
By doing this, Kroll hopes to preserve the value of the site, which would drop if the planning consent were to run out, the report states.
Efforts to sell DeTrafford’s Salford Quays site prior to the collapse of the vehicle did not garner a single formal bid, according to administrators.
Since Wavelength collapsed six weeks ago, two more DeTrafford vehicles have entered administration citing the impacts of the pandemic.
Those companies are behind a pair of completed residential projects in Castlefield, the 138-apartment St George’s Gardens and the 178-home City Gardens.
In September, DeTrafford sold the site of a proposed 400-flat project known as Transition to Renaker, having managed to stave off the threat of another administration.