Defective Sydney Towers to Be Fixed, Put to BtR Market

Two towers in Sydney with “serious defects” will be fixed and sold to build-to-rent operators following a deal with the NSW building commissioner. 

The Imperial Towers were originally developed by Merhis Group, which went into liquidation and was taken over by a subsidy of financier Wingate.

The receiver signed an Enforceable Undertaking on the 22-storey buildings at 9 Hassall Street, Parramatta with the Office of the Building Commissioner.

This voluntary but binding contract enables them to be able to fix the property and deal directly with off-the-plan purchasers to bring those contracts to an end, in anticipation of the building’s sale.

NSW building commissioner David Chandler said the undertaking allowed the developer to fix defects in strata while avoiding more stress and legal costs for buyers.

“The off-the-plan purchasers of units in this building have been on a distressing journey. However, I believe this outcome will be better for them,” Chandler said.

“If they were to settle rather than get their deposits back, they would be settling on a building which has identified serious defects that will be remediated before being rented and may have future defects that may later be identified.

“The NSW regulator will place a higher-level test on lifting orders where the developer has become insolvent and is unlikely to be available to respond if serious latent defects arise.”

▲ Original renders of the buildings in Parramatta. Nearly 100 apartments had been sold.

Merhis Group’s Hassall Developments Pty Ltd was the original developer of the apartments when receivers and liquidators were appointed. The original builder of the apartments was Merhis Build Pty Ltd.

A Wingate spokesperson said in a statement to the ABC it was “pleased to have worked co-operatively with the building commissioner to reach this outcome, the first of its kind in the state”.

“Converting the property to a build-to-rent asset helps to address the current housing shortage in NSW by providing further residential rental accommodation [179 apartments and 200 car spaces] in Parramatta, which has a rental market has a vacancy of [about] 1.0 per cent,” the spokesperson said.