Miami tower doubt in developer’s liquidation
THE future of a 54-unit tower opposite one of the Gold Coast’s most popular surf clubs is uncertain after an apartment developer collapsed and the council rejected its building application.
Developer Caydon Group Holdings went into liquidation on Monday. Managing director Joe Russo blamed prolonged Covid-19 lockdowns, interest rate hikes, lack of labour and skyrocketing building costs.
It is unclear what impact the liquidation will have on Mr Russo’s Caydon Property Group, which has applied to develop an 18-storey apartment project opposite the North Burleigh Surf Life Saving Club at Miami.
The tower was to have 54 units and replace an ageing three-storey unit block on The Esplanade. However, it was rejected in February by Gold Coast City Council, which said it was too big for the site.
The developer is appealing the decision in the Planning and Environment Court. The matter is next listed for today.
A spokesman for Caydon declined to answer specific questions about the Miami proposal, saying only that “the project and its options are under assessment”.
Property records show Caydon Miami, a company ultimately owned by members of the Russo family, paid almost $18m for the site in several transactions between March and November last year.
Neither Caydon Miami nor Caydon Development Group were in liquidation as of Wednesday afternoon.
Caydon has developed thousands of apartments across Melbourne and is also developing a $1bn commercial precinct in that city.
The administration of Caydon Group Holdings came two years after its auditor warned of its ability to continue as a going concern.
The company’s auditor, ShineWing Australia, drew attention in 2020 to the company’s financial report which indicated that current liabilities exceeded its current assets by $94.2m at the end of that financial year.
Mr Russo told media that two years of Covid-19 lockdowns in Melbourne had caused business uncertainty and severely impacted sales.
“Pressure on construction costs resulting in builder insolvencies and supply chain interruptions, and now the interest rate pressures and negative house price sentiment has placed additional pressure on our operations,” he said.
“It has been extremely difficult to make this decision, but to ensure the best possible outcome for all of our partners and customers, we have had to commence the liquidation of part of our Australian business.”
McGrathNicol partners Matthew Hutton and Matthew Caddy have been appointed receivers following the appointment of Malcolm Howell, of Jirsch Sutherland, as liquidator.
The receivers appointment to parts of the company was made by OCP Asia which was funding Caydon’s residential and commercial property, sites under development and land holdings.