Narrative
Full Description
Project narrative
On June 30, 2021, China Construction Bank (New Zealand) entered an approximately $17.4 million NZD loan agreement with Du Val Build to Rent Limited Partnership — a New Zealand-incorporated limited partnership to invest in residential rental properties with Du Val BTR GP Limited, a New Zealand-incorporated company controlled by New Zealand real estate and investment firm Du Val Capital Partners Limited (DVCP), as its general partner, and owned by Du Val BTR Limited, a vehicle for Du Val Capital Partners and third parties — to finance its acquisition of two Auckland rental properties. The loan carried a maturity period of three years and a final maturity date of June 30, 2024. This loan was secured by (i.e. collateralized against) a first ranking mortgage over the 69 McKenzie Road, Mangere Bridge, Auckland and 2-6 May Road, Mangere East, Auckland properties. Specifically, the collateral was a pledge of all present and after acquired property by Du Val BTR GP Limited dated June 30, 2021 with Personal Property Securities Register (PPSR) number F376TG9AMR5Y7C48 and a pledge of intangibles and all present and after acquired property by Du Val BTR GP Limited dated June 30, 2021 with PPSR number F63Y4E2SN2R3G8D5 and a pledge of all present and after acquired property by Du Val Build to Rent Limited Partnership dated June 30, 2021 with PPSR number F376TG9AMR5Y7C48 and a pledge of intangibles and all present and after acquired property by Du Val Build to Rent Limited Partnership dated June 30, 2021 with PPSR number F63Y4E2SN2R3G8D5, all under a composite general security deed dated July 1, 2021. The proceeds of the loan, as well as investment from wholesale investor funds, were used to acquire two residential rental properties: 69 McKenzie Road, Mangere Bridge, Auckland, consisting of 72 studio units across eight separately titled 63 car parks, the entire development being privately leased, and 2-6 May Road, Mangere East, Auckland, consisting of 99 studio units across 11 separately titled apartment blocks with 42 car parks, of which 36 units were leased to registered community housing provider, Home In Place, with the balance of units available as private rentals. The McKenzie property was acquired for $14.64 million NZD and the May Road property was acquired for $20.12 million NZD, both in early July 2021. Rent received from the properties was intended to fund the debt service costs associated with the CCB loan as well as cash distributions to the investors and management fees to the general partners. In March 2023, it was reported that investors into Du Val Group's Built to Rent Fund — some 20 into the $34 million NZD — were looking into legal advice for civil action after payments from the fund were suspended under the 'liquidity events' payout clause. Investors into a different Du Val fund, its mortgage fund, had similar issues. In October 2023, Du Val Build to Rent announced that it was seeking a new lender to refinance the CCB debt. In late May 2024, Du Val Rent to Build's managers called the first meeting of the partners since the creation of the fund to be held less than two weeks before to the CCB NZ loan's maturity on June 30, 2024. On August 2, 2024, the High Court of New Zealand placed Du Val Group and its associated entities into interim receivership at the request of the Financial Market Authority. On August 2, 2024, pursuant to the composite general security deed dated July 1, 2021, CCB NZ appointed two insolvency receivers and managers for Du Val Build to Rent Limited Partnership and Du Val BTR GP Limited. The borrower officially defaulted on the loan. On August 21, 2024, statutory managers were appointed and replaced CCB NZ's ones, because of the wide issues with Du Val and the complexity associated. In August and September 2024, Du Val Build to Rent proposed a short term bridging loan extension for the CCB NZ loan. In early September 2024, CCB NZ stated that it would roll over the loan on the condition that Du Val Capital Partners was no longer involved. A September 2024 Cabinet Paper from the office of Commerce and Consumer Affairs Minister Andrew Bayly revealed that Du Val entities had about $250 million NZD in liabilities, with various different creditors and identified an allegedly suspicious transaction with the Du Val group. In February 2025, the two properties were put up for sale by the receiver, with CBRE managing the sale.