DeTrafford owes £50m to No1 Castlefield investors
Failure to pay back a £9.8m loan taken out in 2018 has seen it balloon to £37.3m, while individuals who paid deposits on apartments within the failed 420-home Manchester development are owed a further £13.4m.
DeTrafford sold 331 apartments within the £75m No1 Castlefield scheme off-plan but has failed to deliver a single one, leaving investors and lenders wondering where their money has gone.
A report into the company’s affairs by administrator Interpath Advisory, appointed to DeTrafford No1 Castlefield last month, paints a grim picture for investors, some of whom are owed more than £100,000.
In total, individuals who have paid deposits are £13.4m out of pocket, Interpath’s report states.
A group of investors, whose contributions to the project total £9m across 206 flats, are expected to receive some repayment, subject to asset realisations. How much remains unclear, according to Interpath.
These investors hold UN1s with Land Registry over the Ellesmere Street site, making them secured creditors.
The other individuals who have paid £4m in deposits for the other 125 apartments sold off-plan do not hold UN1s and are ‘highly unlikely’ to get anything, the report states.
While some investors asked for the deposits back due to a lack of progress, the sale of apartments within the scheme continued despite DeTrafford having “no working capital”, according to Interpath.
Interest rates bite
Endless Bridge, the company that lent DeTrafford £9.8m for No1 Castlefield in November 2018, is also hoping for a return on its investment.
The Endless Bridge facility was due to be repaid on or before 21 November 2019.
However, DeTrafford was unable to keep up with repayments and the balance of the loan at the time of Interpath’s appointment is £37.3m, almost four times the original amount, according to the report.
Interpath expects some distribution to be made to Endless Bridge but anticipates a “significant shortfall”.
DeTrafford had attempted to secure additional funding to pay back Endless Bridge and kick start the project but failed to do so, the report states.
Manchester City Council’s planning committee granted planning permission for No1 Castlefield in November 2017, but almost six years on, the site remains undeveloped.
DeTrafford No1 Castlefield’s collapse is the seventh company in director Gary Jackson’s empire to fall.
Most recently, a pair of SPVs that control one of the two proposed blocks that make up the DeTrafford’s 366-home Gallery Gardens scheme in Manchester was placed into administration.
Just a few days before the collapse of Gallery Gardens, the vehicle behind the developer’s completed 166-apartment Sky Gardens was put into administration.
Last August, Place North West revealed that the company behind Wavelength, DeTrafford’s proposed 421-home development at Salford Quays, had gone into administration.
Creditors on this scheme, which has never been built, are owed almost £11m, according to a report by administrator Kroll.
In September, BDO was appointed by lender Maslow as administrator to DeTrafford St Georges Gardens, the vehicle behind the completed 138-apartment development of the same name.
The following month, Maslow once again instructed BDO, this time over DeTrafford City Gardens, the company behind a 109-flat development.
In December, a report by BDO on City Gardens and St George’s Gardens revealed the companies owed a combined £26m to creditors.
The collapse of the Sky Gardens vehicle means the companies behind three of the four completed blocks within the Castlefield masterplan are in administration. Roof Gardens is not in administration.
DeTrafford was contacted for comment.