Lack of funds spike Mistra mega-project - reports

A lack of funds has spiked plans by a Kuwaiti firm to build a 12-storey mega-project with more than 700 luxury apartments at the former Mistra village.

The Times reported sources close to Gemxija Crown Ltd, the joint venture between Kuwaiti and Maltese investors, that “the project was dropped because the necessary funding was not tapped”.

A source was reported to have said that despite the positive property market conditions, “there is a lot of such development going on and this has put the viability of this mega-development into question on the long term.”

MEPA gave the controversial development the green light in 2013 after a long process. In 2008 it had already issued an outline development permit.

After a €42.2 million Bawag Bank loan had to be called in on default by Maltese developers JPM Brothers, Kuwaiti property magnates Massaleh stepped in to push the project forward.

The land in Xemxija owned by JPM Brothers were also scheduled to be sold by court auction: six parcels of land, in total comprising 3,215 square metres, were going on sale for a total of €3.87 million.

In 2010, JPM was served with a court notice to pay up €42.2 million and €1.3 million in interest, on a defaulting loan taken out with Austrian-owned Bawag bank. The loan was signed between Bawag and Gemxija Crown for the development of 868 residential units on the site of the former Corinthia Mistra Village.

Despite the setback for JPM Brothers, owners Peter and Geoffrey Montebello proved able to release their construction stock: in 2010, they sold the unfinished construction on Depiro Street in Sliema, the site of the former Galaxy Hotel, to new developers who eventually completed Belmonte Heights.

They also managed the completion of their signature project, the A3 Towers in Paola. In 2010, they sold 1,800 square metres of basement garage spaces, a ground floor showroom and the first two floors for €1.74 million to General Workers Union subsidiary Paola Estates.