Toyota-backed Coast firm revs things up
TOYOTA and its Gold Coast “driver” appear set to accelerate their property activities as the result of a Brisbane crash. The airbags didn’t go off when homebuilder Privium, which operated across three states, hit the wall in November owing more than $40 million.
The Underwood company’s failure left more than 2000 customers in the lurch, many whose homes had yet to be started.
It was common knowledge in the property industry prior to the appointment of administrators that the construction arm of the Homecorp business started by Gold Coast developer Ron Bakir 18 years ago had been casting an eye over Privium assets.
Ron in 2018 sold 51 per cent of Homecorp Constructions to a company controlled by auto giant Toyota.
Misawa Homes, with annual sales of more than $5 billion and keen on offshore expansion, had opened a Brisbane office three years earlier.
Its Homecorp buy came after protracted due diligence and was aimed at substantially lifting the Gold Coast builder’s output of 400 homes a year.
That saw a move into the South Australian market two years ago and there were NSW and Victorian ambitions.
One way to realise those ambitions was to buy a large slab of the operations of Privium, which had a Victorian presence.
A consultant says Homecorp Constructions started due diligence on Privium in June but, after nearly five months of homework, decided the numbers didn’t add up and walked away.
The decision was timely – three weeks later Privium failed.
Now it’s emerged that while Homecorp avoided buying exposure to a crash, it has picked up some of the Privium pieces.
They include taking over 200 or so contracts for homes that Privium hadn’t started.
Homecorp Constructions also has boosted its workforce by hiring 70 Privium staff and picked up an IT system for around $200,000.
A number of Privium vehicles also have been secured – some perhaps Toyotas – a move that helped offset the difficulty of sourcing new ones.
Last month it emerged in a liquidation that secured creditors would get no more than five cents in the dollar.
The collapse has been blamed on the cost of construction outpacing revenue growth.
Homecorp Constructions isn’t showing any signs of becoming more cautious as a result of the experience of Privium.
In fact, it appears to be building up a head of steam going into 2022, aided by its Privium “bites”.
The company built 600 homes in Queensland alone in 2021, operating from Rockhampton to the border and inland to Toowoomba.
It seems the aim in the latest year is to get to 1500, a figure that would take in northern NSW contracts and some in South Australia and might bring an “Oh what a feeling” reaction from Toyota.
Meanwhile, the Bakir-founded Homecorp group parent company could well be quietly happy over the surge in rents on the Gold Coast.
It’s heading toward midyear completion of the first buildings in a four-tower buildto-rent project at Varsity Lakes.