A collapsed property giant, which went under with around 130 unsold apartments in Melbourne, has left behind a staggering $200 million in debt, according to liquidators.
The company called Caydon, which had the backing of prominent figures in Asia, went into administration at the end of July.
Despite boasting a portfolio of projects worth $4 billion at one stage, according to the trustee, the failed development company has now left millions in debt.
He blamed Covid lockdowns and price factors for his demise and owed an estimated $200 million in debt to his financier OCP Asia and $285,000 to Mercedes-Benz for a luxury wagon, a report to creditors showed.
He also had an outstanding tax bill of about $7.5 million and had not filed a tax return in 2020 or 2021, according to the report, while 23 employees were also owed money, including one employee who claimed he had shelled out $ 21,000.
While the developer made $3.7 million in pre-tax profit in the year to June, it was unable to meet immediate debts and liabilities outweighed its assets by nearly three times, the creditor’s report revealed.
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At the time of its collapse in July, Caydon managing director Joe Russo said it had delivered 3,000 apartments, hotels and offices since it started but had faced a 45 percent increase in construction costs during last year.
“Sadly, over the past several years, Caydon has had to deal with one difficult market situation after another,” he said.
“Construction cost pressure resulting in builder insolvencies and supply chain disruptions, and now interest rate pressures and negative home price sentiment, have put additional pressure on about our operations.
Claims of $15.6 million
Among Caydon’s assets were about 130 unsold apartments in his Home development in the affluent suburb of Alphington, priced from just under $600,000 to nearly $700,000.
There was also “a major land bank in the Melbourne suburb of Cremorne where Caydon was developing a $1 billion retail precinct on the site of the old Nylex silos,” according to the australian.
The creditor’s report outlined 43 unsecured creditors, who were owed $15.6 million from the failed developer.
This included $535,000 outstanding for law firm King & Wood Mallesons, $281,000 for real estate agency Knight Frank Australia, $124,000 for Deloitte Private and $44,000 for Google.
Other Australian developers have faced difficulties of late, scrapping projects and blaming skyrocketing construction costs and labor shortages.
Perth developer Sirona Urban scrapped a $165 million luxury tower, where more than 50 per cent of the plan’s apartments had been bought, which was set in one of the tallest apartment buildings in the state.
Sirona Urban owner Matthew McNeilly said in July that construction costs had risen 30 percent in the last 10 months, while a shortage of shops was also causing problems.
In the same month, Melbourne developer Central Equity abandoned plans to build a $500 million apartment tower on the Gold Coast, blaming the crisis in the construction industry and rising construction costs for causing the project is not profitable.
Earlier this month, developer Cedar Woods shelved a $180 million development in Brisbane that was scheduled to deliver 250 homes, blaming rising costs, labor shortages, significant rainfall in Queensland and deadlines. extended construction.
One homeowner described the development company’s decision as an “absolute joke” claiming that it would leave his family financially “fucked”.
It comes as the construction industry faces a crisis with a series of collapses this year.
The latest was Queensland residential builder Oracle Building Corporation Pty Ltd, which went into liquidation on Wednesday, leaving 70 employees and 200 suppliers and subcontractors out in the cold, as well as 300 homes that were in the pipeline for completion.
The crisis has been caused by a perfect storm of supply chain disruptions, skilled labor shortages, skyrocketing material and logistics costs, and extreme weather events.
Another Queensland builder, Besse Construction, collapsed last week due to $1.7 million.
Earlier this year, two major Australian construction companies, Gold Coast-based Condev and industry giant Probuild, went into liquidation.
In July, the Supreme Court ordered Snowdon Developments liquidated with 52 staff, 550 homes and more than 250 creditors owed for just under $18 million, although it was partially bought out less than 24 hours after bankruptcy.
Others also joined the list, including Inside Out Construction, Solido Builders, Waterford Homes, Affordable Modular Homes, and Statement Builders.
Then there was the NSW construction company Willoughby Homes, which entered voluntary administration last week, leaving at least 30 homes in limbo.
It also closed Norris Construction Group, which was in Geelong, collapsed in March with $27 million in debt. He owes about 140 employees $3.2 million that he is unlikely to be able to pay, according to the liquidator’s report.
In addition, Melbourne-based company Blint Builders collapsed with about $1 million in outstanding debt to 50 creditors, according to liquidators.