Kaye linked to major developer

Property spruiker Henry Kaye has been linked to one of Australia's most prolific development groups, Urban Property Corporation. Kaye was a director of UPC until he resigned in March this year after serving three years with the now controversial development group.

However, Kaye’s Vilacon Corporation remains a major shareholder in UPC.

Directors of UPC include Clement Lee, also a director of Riverside Properties, as well as Luke Adams, and the “two Eddie’s”, Eddie Puhar and Eddie Sanfilippo, two of Melbourne’s best known property developers who are co-directors of one of Victoria’s biggest home builders Burbank Homes.

All four current directors of UPC this week distanced themselves from their much-maligned former fellow director.

However, the Kaye – UPC connection is evolving into a major link in Australia’s property web that has trapped thousands of investors seeking to make their fortune out of the boom time apartment market.

During the time Kaye was a director, UPC has developed hundreds of apartments, many of which have been on-sold to Kaye’s National Investment Institute clients.

The Inkerman Oasis project, a 236 apartment development on the old City of Port Phillip waste plant in St Kilda, was a joint project between Contract Properties and UPC.

UPC’s website crows about the project: “Of the 236 apartments, 32 have been earmarked for the purposes of social housing, 28 of which have been acquired by the City of Port Phillip, underlying the integrity and respect bestowed upon the Directors involved.

”With around half of the development now completed and settled, it has become renowned for its innovative and natural design, utilising half of its three hectare site for the creation of lush, native landscaped gardens,” it claims.

The majority of apartments were sold to Kaye’s unsuspecting seminar clients on the basis of “no deposit and no money down”.

Kaye claims in The Age to have sold the apartments at “wholesale” prices to his seminar clients after he gained a special price from “the developer” for buying around 200 of the apartments.

At no stage did unsuspecting property punters know that Kaye was also a director of UPC. Until recently, only the directors of UPC knew of Kaye’s real involvement in the Oasis development.

Kaye claimed in The Age recently that “he helps developers by transferring their risk to him, at a price”. The developer he has “helped” the most in recent years is UPC.

The Oasis development is only the tip of the iceberg in the relationship between Kaye and UPC. Kaye’s National Investment Institute clients, most of whom were charged between $15,000 and $50,000 for the privilege of gaining Kaye’s co-called secrets of buying property.

It would appear Kaye’s greatest “property education” secret is his relationship with Urban Property Corporation.

A number of Kaye’s clients have lost tens of thousands on other UPC developments including Waterford Green at Melbourne’s west suburban Maribyrnong.

Hard luck stories include Henry Kaye client Lisa Santamaria, who paid $368,000 to Urban Developments Australia, an associate company of UPC Santamaria sold the property 112 days later for a $73,000 loss.

Another, is a direct sale of land between Urban Developments and Kaye’s Waterford Green Investments Pty Ltd. Kaye purchased land at 36 Blair Street, Maribyrnong, for a paper value of $76,900. He then on-sold a house and land package to another one of his clients, Ismail Hilmy, for $365,000 12 months later. In November 2001, Hilmy sold the property for $278,500, a loss of $86,500.

UPC developments include the $200 million Wyndham Waters in Melbourne’s west; Heritage Gardens in North Fitzroy; parts of both Waterford Green and Kensington Banks; Dalgety House in Bourke St; 408 Lonsdale Street; as well as commercial projects.

Despite repeated requests by propertyreview.com.au, UPC refuses to acknowledge a link to Henry Kaye.