Flat/Hierarchical layout

Is it possible to setup a multi project build with the following structure?

    -- master
        -- build.gradle
        -- settings.gradle
    -- projParent1
        -- projects.gradle
        -- project1
            -- src
            -- build.gradle
        -- project2
            -- src
            -- build.gradle
        -- project3
            -- src
            -- build.gradle

Currently we have a multi project gradle setup as a typical hierarchy, however the master gradle project is in a different vcs repo than the other projects (projParent1 and projParent2). At the moment we checkout master into a root directory and then check out sub projects under the root. However svn and git do not work well with that setup. I tried to convert the structure to the one shown above but i have problems. If i type gradle projects i get output like:

Root project 'master'
+--- Project ':project1'
+--- Project ':project2'
+--- Project ':project3'

However if i type gradle :project1:compileTestJava (from within master) i get:

:project1:compileJava UP-TO_DATE
:project1:compileTestJava UP-TO_DATE

but nothing is built.

Is the above setup supported or are we mixing the flat and hierarchical setup which is not supported?