A student development company in the process of building a block in Everton has gone into administration, leaving investors concerned as to what will happen with their money.
Pinnacle Student Developments (Liverpool) was building the Quadrant block on Shaw Street, Liverpool, but work on the site has stalled for almost two years.
The firm has received overseas investment from wealthy benefactors ranging as far as Hong Kong and China, but funds in the project have now severely dried up.
Paul Flint and Paul Dumbell from KPMG’s restructuring team have been appointed Joint Administrators of Pinnacle Student Developments (Liverpool) Limited.
KPMG said that most of the apartments in the building had been sold off-plan to individual investors, most of whom were based abroad.
Associate partner at KPMG and joint administrator, Paul Flint, said they had no alternative but to place the company into administration, and that they will be exploring the options available to maximise the return to the buyers company and other creditors.
The deposits were taken by a separate company, Quadrant Buyers (Liverpool) Limited, and the money was used to fund the development on behalf of the buyers.
The Manchester-based company was a Special Purpose Vehicle created to develop the building and had no direct employees.
Richard Kemp CBE, Leader of the Liberal Democrats in Liverpool, fired a warning shot at potential property investors in Liverpool in the tweet below.
KPMG attributed the stoppage of building work at the 252 apartment Quadrant scheme to the collapse of the building firm PHD1 Construction in 2016.
PHD1 had further projects for North Point Global in Pall Mall, New Chinatown and the Baltic Triangle, but these have also stalled amid the financial crisis, with NPG putting them up for sale.