Another Metrics gamble
Andrew Lockhart is an accidental restaurateur turned accidental builder
Last week, The Australian Financial Review revealed the debts of bankrupt property developer Jean-Dominique Huynh now exceed $600 million, with the bankruptcy trustee of his failed empire disclosing an inventory of major creditors including private credit managers MaxCap and Metrics.
Rampart was already on the verge of inaugurating a new segment entitled "Metrics' Magical Deal of the Week", and Andrew Lockhart's ill-fated entanglement with JDH Capital is a worthy next instalment.
Metrics appointed a receiver to JDH's Nautique development – the old Vibe Hotel at Sydney's Rushcutters Bay (and it is truly line ball which version of the building is uglier) – in December last year and is progressively recovering the balance of its outstanding loan as the apartments are sold to vision-impaired investors.
But commercial property observers might also recall that after redeveloping the iconic Sirius building in Sydney's The Rocks, JDH Capital acquired the old Sir Stamford hotel at Circular Quay in September 2022 for $211 million, with plans for a boutique luxury project of just 68 apartments. The vendor, Stamford Land, crowed to the Singapore Stock Exchange that the price it secured was an eye-popping $120 million higher than its last valuation of the site (the property had been sitting on Stamford Land's balance sheet at $90 million).[[Stamford Land said, "A recent valuation commissioned by the Company solely for the preparation of the Group's audited financial statements for the financial year ended 31 March 2022 suggests that the market value of the Property as at 31 March 2022 is approximately A$90 million (the 'Report'). According to the Report (dated 31 March 2022), the basis of valuation is freehold/long leasehold going concern values of the properties on a walk-in, walk-out basis, subject to hypothetical hotel management agreements."]] Metrics provided JDH with a $187 million loan to fund the purchase – an equally eye-popping 88 per cent loan-to-value ratio.[[I put the original and accrued loan figures to Metrics, which did not contest them. Metrics apparently relied on a valuation marking the site at $260 million. Of course it did…]]
