Apartment king loses his crown

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Wensley’s corporate empire crumbles as buyers default

The ritzy 2007 opening of new Frankton Road development The Club must now seem a surreal memory for fallen Queenstown apartment king Ross Wensley.

It was a warm October evening, champagne flowed and guests wolfed back canapes. The sweet live sounds of Christchurch songstress Anika Moa wafted on to the lakefront balcony from the lounge of one of the lavish new pads.

It was Invercargill-based Wensley’s sixth big development in the resort and took his tally of apartments built to more than 300. Now his empire is in tatters.

His Wensley Developments Ltd was last month placed in the hands of Auckland liquidator Lloyd Hayward, owing unsecured creditors more than $700,000.

That followed Wensley’s liquidation of subsidiary Wensley Developments The Club Ltd in November 2008. Hayward’s first report on that says the subsidiary was adversely affected by the credit crunch hitting property values, which resulted in one of the company’s lenders getting cold feet.

A week ago on July 31, another subsidiary, Wensley Developments The Beacon Ltd, was also put into liquidation.

Wensley has been stung by buyers of his latest apartment complex – the 28-unit Marina Baches development at Frankton Marina – pulling out.

The first report by Hayward on Wensley Developments Ltd says 20 out of 21 pre-sale purchasers failed to settle on Marina Baches, whilst unsold apartments remain under the control of the financiers.

“Profit margins for the sales of these apartments that were initially expected have not eventuated. In the current economic environment, these profits are not likely to be achieved,” the report says.

Wensley’s former right-hand man Graeme Kruger – who co-owns one Shore and one Club apartment, both Wensley projects – says he warned Wensley Developments to be careful more than four years ago when he was general manager.

“In my opinion there were clear warning signs that there should have been more prudence,” Kruger says this week.

“It had to do with a lot of other developments coming into Queenstown – people thinking it was the goldrush capital. Sales were becoming tougher.

“It’s at that point one has to become smarter or look at diversifying. Maybe don’t focus on Queenstown.”
However, Kruger says it’s also a “bit rich” to speculate now with the benefit of hindsight when Wensley was the one managing all the risk.

“I mean, there’s worldwide economists who didn’t get it – so for Ross not to get it is not such a bad thing.”
Kruger remains optimistic about his personal investment in Wensley projects – “Ross believed in Queenstown and in time he might be proved correct.

“If you take a long-term view you don’t lose.”

Wensley says he’d do nothing different – “No, of course not. All we need is for people to honour their agreements. That takes time through the court and that’s the process we’re in now.

“If you’ve got legal binding documents, and if you can’t run your business based on those, then the world is falling apart,” he says.

He shares Kruger’s optimism about long-term value.

“Every bit of waterfront property around Lake Wakatipu has got to be super value in comparison to similar products all around the world.

“If you can magically own some waterfront property now, whatever it cost you, it’s still going to be worth a whole lot more at the end of the next decade,” Wensley says.