Hutchinson Builders had bid for the project but could not compete with Probuild on the construction tender price.
With an estimated $5 billion in office, residential and infrastructure projects, Probuild had 18 major projects underway when administrator Deloitte Australia was appointed on Wednesday.
Stronger-than-expected pre-sales for Cbus Property’s 443 Queen saw construction begin ahead of schedule in August 2017
Probuild’s long-delayed 443 Queen St apartment project in Brisbane was a major contributor to the construction company’s failure as costs ran out of control, according to industry insiders.
Hutchinson Builders had bid for the project but could not compete with Probuild on the construction tender price.
With an estimated $5 billion in office, residential and infrastructure projects, Probuild had 18 major projects underway when administrator Deloitte Australia was appointed on Wednesday.
Due to its unique design the 443 Queen St tower has been described as a “tropical high rise Queenslander.”
“We came second on that job but Probuild were well under us (on price),” Hutchinson Builders chairman Scott Hutchinson told Brisbane’s Courier Mail following the rival Probuild going into administration this week.
443 Queen Street 443 Queen Street, Brisbane QLD 4000
“Costs ran out of control,” Hutchinson speculated.
“Financiers are backing these projects without asking whether they have the balance sheet to complete the jobs.”
He said clients also had a role to play ensuring the price of building a project added up for contractors.
“The problem is some will want to get a backyard builder to construct the Opera House,” Mr Hutchinson said.
Mr Hutchinson said his firm would be interested in taking on incomplete projects but it was too early to make any decisions.
Hutchinson noted that Probuild’s South African parent Wilson Bayly Holmes-Ovcon (WBHO) had realised to its peril that the Australian construction industry was one of the toughest in the world to make money.
In a statement to the Johannesburg Stock Exchange on Wednesday, WBHO said the “level of risk versus reward” in the Australian construction market meant the company would no longer provide financial assistance to Probuild.
Responsibility for the cost blowout of completion of the 47-level apartment tower at 443 Queen Street in the heart of Brisbane’s CBD will now be taken up by its developer Cbus Property, which is understood to have approached Melbourne lawyers Arnold Bloch Leibler on Thursday to represent them.
The press reports have suggested the project “may be haemorrhaging as much as $120 million,” The Australian reported.
WBHO blamed, in part, the Australian government’s “hardline approach of managing Covid-19”.
“A combination of border restrictions, snap lockdowns and mandatory work-from-home regulations for many sectors, has had a considerable impact on property markets,” it said in a statement.
Stronger-than-expected pre-sales for Cbus Property’s 443 Queen had seen the construction announcement ahead of schedule in August 2017 with the appointment of “tier 1 firm Probuild.” There was a 2020 completion schedule.
At the time, more than half of the 264 apartments had been sold as demolition of the office onsite and construction got underway at what was the last riverfront location in the Brisbane central business district.
The 47 storey tower which will include 106 one bedroom, 106 two bedroom and 54 four bedroom apartments saw 52 sales on its November 2016 launch weekend. Prices ranged from $569,000 for a one-bedroom apartment to $3 million for a four-bedroom. The vast majority of buyers were Brisbane owner occupiers, with 10 per cent of buyers from interstate.
By October 2020 when construction had been scheduled for completion, The Courier Mail reported it was only up to level 32 after a “revolving door of Probuild site managers.”
A blunder had seen windows in nine levels pulled out which threw the work sequence out for plumbers, plasterers, tilers and other trades.
COVID-19 restrictions on the three lifts on site allowed only four people at a time instead of the usual 10, so with almost 200 workers on the job, it’s taking some of them an hour before their work started.
Probuild wanted the trades to put in longer hours, but ran into opposition from the CFMEU.
There was one crane on site instead of two as the firm sought ways to cut costs.
The development application for the project was lodged with the Brisbane City Council in 2015, with subsequent extensive court delays from neighbours who were set to have their views impacted.
Article Source: www.urban.com.au
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