The future of a site at the edge of the Wollongong CBD is up in the air after a lender took the property out of the hands of the developer and sold it - likely leaving investors out of pocket.
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The news comes as administrators have been appointed to deal with several other projects from Kingdom Developments - with one of those sites also believed to have been sold.
Mid last year Kingdom Developments lodged a development application for a nine-storey apartment block at 7-15 Gladstone Avenue, near Wollongong station.
Wollongong City Council knocked back the proposal but Kingdom took the matter to the Land and Environment Court, winning approval to build in November 2022.
However, the site was put up for auction on December 16 after the mortgagee took possession of the site.
The auction was handled by Colliers Wollongong and managing director Simon Kersten said mortgagee Keystone Capital had supplied a two-year facility to the developers and took control of the property when that money was not repaid on time.
Not including the Gladstone Avenue development, there are at least five other Kingdom Developments projects that are in trouble.
The property sold for $6.2 million - which is more than what Keystone Capital was owed.
There was a second mortgagee on the property and the Mercury understands that, after both they and Keystone were paid out, there was no money left for the 18 investors in the Gladstone Avenue development.
Australian Securities and Investments Commissions (ASIC) documents list at least one Illawarra resident as an investor in the Gladstone Avenue project, who bought 10 of the 100 shares available - likely costing hundreds of thousands of dollars.
"The mortgagee was actually trying to do the best thing by all parties," Mr Kersten said.
"We ran a very good and competitive campaign and they genuinely tried to achieve the highest price they could. They weren't just fire-selling it - we were trying to make sure that we got the best price for it and it was dealt with in the best way possible."
While the site comes with development approval, Mr Kersten said the new buyer may not go ahead with that apartment complex.
Mr Kersten said the new owners had other projects in motion at present and would rent out the Gladstone Avenue site for the time being before working on any future plans.
Despite the sale, the Gladstone Avenue site is still listed on the Kingdom Developments website's Current Projects page.
It gives an estimate of investor returns as high as 159 per cent.
That website lists 26 other properties as current projects, however, at least some of those projects may never be completed.
It's common practice for a developer to create a separate company for each project, in part as a way of protecting investors. If one project falls over, it doesn't affect the others.
Not including the Gladstone Avenue development, there are at least five other Kingdom Developments projects that are in trouble.
Keystone has taken control of a second Kingdom Developments project, in the western Sydney suburb of Austral, and has placed it up for auction with Colliers next month.
On top of that, ASIC documents show that four other Kingdom Development properties - at least one of which includes an Illawarra investor - have all had external administrators appointed.
One of those sites, in the Sydney suburb of Lidcombe, had development approval for a 10-storey unit complex and is understood to have been sold late last year.
While Gladstone Avenue is the only Wollongong site listed on the Kingdom Developments page, there are Illawarra investors in the projects under administration.
Kingdom Developments was contacted for comment but did not reply.
Glen Humphries
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
