The builder of a nearly $1 billion mega development project in Queensland appears to have pulled out quietly, prompting fears of delays and additional costs.
Building company Descon Group Australia was appointed with much fanfare to construct two towers as part of a massive resort-like project in the Gold Coast.
The $800 million development called Victoria & Albert has been underway at Broadbeach since July last year.
Developer Iris Capital is overseeing the building works, as is local project management firm Eastview.
However, there is no longer any mention of Descon on any of the websites relating to the venture.
Descon Group Australia confirmed to news.com.au that it was no longer contracting for the developer.
There is now uncertainty over who will replace the building firm and if this will cause construction costs to take longer and blow out.
Although Descon is a Melbourne-based building firm, it was reportedly brought onto the Gold Coast project after two major Queensland builders – Condev and ProBuild – collapsed into liquidation.
But just six months later, Descon is no longer involved in the fraught project.
The construction company assured news.com.au that they had split from the Victoria & Albert under “amicable” terms.
“Descon and the developer have mutually agreed to amicably part ways on the project,” a spokesperson said.
They said they had made the decision to back out because of “current market conditions” where they have only remained building for “select clients”.
The CEO of developer Iris Capital was insistent that the construct was carrying on “business as usual” despite the setback.
Head of developer Iris Capital, Sam Arnaout, said in a statement to news.com.au that “The Descon phase is complete, no program is lost and it’s business as usual”.
He said Descon had finished a demolition of the site.
The developer also said they were looking to appoint a new builder.
“Iris Capital and Eastview will be taking on the next phase of works whilst we finalise negotiations with our builder to deliver the final stage of construction for the project.”
The central Broadbeach project said it had sold half its apartments and had generated $400 million in sales in the past year.
Originally, the mixed-use precinct was meant to be completed by 2025 but other reports now indicate the target has been pushed back to 2026.
The developer did not respond to this specific question.
The entire project was originally slated to cost $800 million and was expected to generate more than 1000 jobs.
The east tower Dascon was meant to build, the Albert, was planned to have 122 one-, two-, three- and four-bedroom apartments spanning 40 levels.
Meanwhile, the west tower, The Victoria, will see 279 one-, two- and three-bedroom apartments built.
The construction industry has been struggling with inflation and the supply chain crisis making key materials rise in price. Many have been facing financial ruin, both residential and commercial, as they are stuck in locked-in contracts that are no longer profitable because of current market rates.
A number of large firms entered into insolvency over the past year including Probuild, Condev Construction, Pivotal Homes, Waterford Homes, Privium, Home Innovation Builders and Norris Construction Group.
It was caused by a perfect storm of supply chain disruptions, skilled labour shortages, skyrocketing costs of materials and logistics, and extreme weather events.
Story Credit: news.com.au