Upper Hutt's heavily indebted The Mall shopping centre has been put up for mortgagee sale.
It is being sold by receivers of Trentham City Investments, appointed in March by New Zealand Property Finance Partners, which holds a $24.2 million first mortgage.
The failed South Canterbury Finance holds a $26.6m second mortgage on the property.
Market sources suggest proceeds from the sale would barely cover the first mortgage.
The major shareholders, local businessmen Colin and Michael Gibbs and Australian co-owners, stand to lose all their investments in the business.
The sale includes more than 2.5 hectares of land, over 300 car parks, and other commercial buildings just south of The Mall which are leased to Smiths City, Pets Centre, Ascot Cinema and the Defence Force.
The Warehouse and Farmers are the two largest tenants in the mall, which also has 40 smaller shops. Other tenants include Postie Plus, Michael Hill, ASB and Hallensteins.
Colliers International agent Bill Leckie said the properties in Main, Logan and Queens streets generated a net annual rental income of almost $2.5m a year. The Mall has 17,300 square metres of net lettable floor space over two levels.
The shopping centre was developed in the 1970s by AMP and was originally known as the Logan Plaza. Local developer Lance Cottam took it over in 1995 and Colin Gibbs, who owned the nearby Hazelwoods department store, bought into it about eight years ago.
It was rebranded Trentham City when he commissioned a $60m redevelopment aimed at breathing new life into the centre of Upper Hutt and countering the redevelopment of Westfield's Queensgate Mall in Lower Hutt.
The redevelopment secured The Warehouse as an anchor tenant but Mr Gibbs said it struggled to find enough other major tenants. "We anticipated a better future," he said.
In 2007 Australian-based Pelorus Property, which has a history of buying distressed properties, formed part of a new consortium with the Gibbs to buy the mall for $45m.
Tenders for The Mall close at the end of the month.
- The Dominion Post