Wellington, Sept 30 NZPA - Lion Nathan Ltd is taking back the 5.2ha brewery site in Newmarket it sold three years ago but is still moving to a new brewery in South Auckland.

AMP and the Abu Dhabi Investment Authority (ADIA) have failed to take a potential $1 billion project on what is believed to be the biggest property development site in New Zealand forward, resulting in its return to the vendor.

The sale of the Khyber Pass Road property for $162 million was agreed in 2007 before the global financial crisis crunched credit and investors' appetite for risk.

Today, Lion Nathan said it is buying Great Northern Developments Ltd (GNDL), a joint venture owned by AMP Private Equity Real Estate Fund II (APEREF II), an AMP Capital Investors-managed fund, and Haumi Development Ltd Partnership.

The terms of today's transaction have not been disclosed but AMP Capital NZ Property Fund wrote down its investment in APEREF II to zero in March and expects no further impact. Lion Nathan said it will suffer no adverse financial impact in the 2010 financial year.

The Newmarket Business Association has expressed a fear that Newmarket could be left with an abandoned site surrounded by graffiti-clad hoardings.

Lion Nathan New Zealand managing director Peter Kean said that he was confident that GNDL would be able to attract good investment interest and ultimately the property will be redeveloped.

The company was on plan to fully migrate to its new brewery in Ormiston Road and would exit in early 2011.

GNDL is now a subsidiary of Lion Nathan, which will be responsible for it and its ultimate value realisation.

Haumi -- the name is Maori for joining or partnership -- is owned by ADIA, which has been coy about its expanding portfolio in New Zealand. GNDL takes its name from a former brewery on the site.

Lion Nathan had received only a $50m deposit. The 2008 annual report of GNDL said a vendor mortgage of $122m was due on September 26, 2010, and GNDL had total assets of $179m.

Graham Law, managing director of AMP Capital Investors, said the strategy was to attract both new equity and project finance. When it became clear that it would not be possible to secure that, GNDL commenced a process with Lion Nathan to agree the terms on which the site would be returned.

AMP Capital Investors had earlier said it was reviewing all aspects of the project where it had planned to build apartments, offices, shops and a high-rise retirement village. The site is about 10 minutes from Auckland's central business district, next to the Auckland Domain, and in the Auckland Grammar school zone.

ADIA invests oil wealth from of the United Arab Emirates and is reported to be the world's second biggest institutional investor. It received Overseas Investment Office approval for the investment.

A separate ADIA-owned Haumi company owns 19.9 percent of AMP Office Trust and 50 percent of that trust's manager.