Raptis Properties in court over failed $60m Pirie St sale

Raptis Properties has taken Capital Property Funds to court for a failed $60m office tower sale in Adelaide’s CBD.

63 Pirie St, Adelaide, which the Raptis family has owned for more than two decades.

The almost $60m sale of the Raptis family’s 63 Pirie St property is before the courts, with buyer Capital Property Funds appearing to have pulled out at the eleventh hour.

Raptis Properties is now seeking to enforce the deal, claiming it is owed the $58.6m purchase price, plus costs.

The property, on the corner of Gawler Pl and Pirie St, is home to tenants such as Lockheed Martin, Macquarie Group and Cowell Clarke.

When its sale was announced in late November, about a third of the floor area was vacant.

In a statement of claim filed with the Supreme Court in Adelaide, Raptis claims that One Managed Investment - a CPF vehicle - pulled out of the deal at the last minute.

The court documents say that Sydney-based CPF struck a deal with Raptis to buy the property for $58.6m on November 25, subject to obtaining finance.

A $1.1m deposit was paid at the time, and by December 7, the financing had been locked away, Raptis says.

“On 7 December, 2022, the lawyer for the respondent wrote ... advising that ... special condition 30 of the contract ... had been satisfied by the respondents having obtained a loan for the purpose of it completing the acquisition of the property pursuant to the contract,’’ the statement of claim says.

“As a consequence ... the respondent’s obligation pursuant to the contract ... were unconditional.

“The contract was in all respects unconditional on and from 7 December, 2022.’’

However, the money was not paid, the claim says.

Raptis says that the settlement was due on February 24, however could not go through because its bank, the Commonwealth Bank, was using the PEXA property portal which is used to finalise transactions in South Australia.

The CBA kept the portal tied up until 4.27pm on the 24th, with the portal closing at 4.30pm.

The settlement was rescheduled by Raptis to the 27th, however the money was not paid on that day.

“The respondent did not settle on the property and: advised the applicant in writing on 24 February that it was not completing the sale on that day, and; further advised the applicant on 27 February that it could not complete the contract at all on its current terms.’’

Raptis said the property remains unsold, and CPF is now in breach of its contract.

Raptis says it has suffered “loss and damage’’ and is also concerned about a loss of capital value, should the property need to be marketed for sale again.

Raptis is seeking orders that CPF either pay the full amount sought, or pay costs including interest, holding costs, costs incurred by a new sales process and damages for breach of contract.

It also wants “damages referable to a likely decline in the market value of the property when it is reoffered for sale to the market’’.

CPF is yet to file a defence in the matter, and has been contacted for comment by The Australian.

When the sale was announced last year, CPF executive director Andrew Kerr said the stability of the Adelaide market was attractive to investors in the wake of Covid-19.

“What we like about Adelaide is that it’s a stable market with attractive yields,” he said.

“By way of example, we expect the equity yield after gearing on Pirie St to be circa 8 per cent per annum. We also really like the fact that there is no stamp duty in South Australia.

“Our house view is that the current economic environment has provided opportunities to acquire commercial office properties that should deliver above average returns in the medium to longer term.”

The total claim is for $59.1m. Raptis Properties is an entity associated with the South Australian-based Raptis family who made their fortune in the fishing industry. It is not associated with the ASX-listed Raptis Group. The Raptis family has owned the property for more than 20 years.

Originally published as Raptis Properties in court over failed $60m Pirie St sale