Is this Strata Development Project Collapse a One Off, or, the Start of a Trend?

The development manager of a planned $2.7 Billion Southbank skyscraper has collapsed owing over $100 Million and the project is now on hold [at best] or may not proceed at all.

It was supposed to be the tallest mixed-use project [so a potential strata record setter] in Australia.

But, now that BSSPV Pty Ltd is in administration, the developer, Beaulah International, is not looking for an equity injection to resurrect the project, which may or may not happen quickly or at all.

And, of course, there’s the usual trail of unpaid professional, contractor, and investor creditors that look like recovering nothing from their work on this project.

Whilst none of this is new as we’ve seen property development and developer collapses, there seems to be [again] an increasing number of similar failures in the last year, which may signify the start of a trend.

That’s likely because of the challenges facing property developers including a shortage of development sites, increasing site acquisition costs, slowing and more difficult planning approvals, increased construction costs, flattening property prices and high interest rates.

If so, that’s bad news for the government’s plans to increase medium and high density apartment development in total and as a proportion of new housing and for strata managers and suppliers of goods and services to strata buildings, future growth plans.

You can read more about this development story from Real Commercial here.