A Chinese-backed scheme to build up to 10,000 units in 20 towers at Springfield has collapsed
An ambitious 10,000-unit development project near Brisbane has quietly been scuttled as the Chinese backers suffer enormous losses.
QLD Business
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It was the supremely ambitious project which promised to utterly transform the skyline of Springfield.
The $6.3 billion scheme, unveiled by Chinese-owned R&F Property Australia with much fanfare five years ago, aimed to deliver up to 10,000 new apartments in the fast-growing satellite city southwest of Brisbane.
About 20 towers — including one set to become the city’s tallest at 24 storeys — and 9000sq m of retail shops and offices were envisioned as part of the “Central Gardens’’ masterplanned community to be built in stages over 20 years.
But the proposed development, which was supposed to arise across a prime 31ha site overlooking the ritzy Greg Norman-designed Brookwater Golf Course, has now fallen in a heap.
A display centre, built almost two years ago at a cost of about $2 million, sits empty and abandoned next to the golf course clubhouse.
The project’s demise highlights both the mounting pressures facing the property sector and the yawning gap it has left in Springfield, where $18 billion worth of development has sprouted up since its launch 30 years ago.
An R&F insider revealed that the plug was pulled on the joint venture project late last year as enormous financial losses burdened the embattled Chinese parent company and its Australian subsidiaries.
But a Springfield City Group spokesman disputed that version of events this week, saying a “termination notice’’ had been served on R&F for reasons not divulged.
Yet, with development approvals secured and earthworks done, it appeared as late as March last year that it was all systems go for the first stage featuring four towers and more than 500 units, as well as a man-made lake.
Back then Springfield chairman and co-founder Maha Sinnathamby joined R&F general manager Lai Zhi to cut a ribbon opening the final 1km stretch of Brookwater Drive.
The two camps shared the $10 million expenditure on the road, as well as another $10 million on water and sewer infrastructure upgrades ahead of the start of unit sales promised by Mr Zhi.
“R&F Property Australia intends to launch the Central Gardens residential apartment community to the market in the second quarter of this year (2021),’’ Mr Zhi said on the day.
“The opening of this road will ensure potential purchasers understand the inherent qualities of good access, amenity and proximity to the Brookwater Golf Course, train station and AFL stadium that this development possesses.”
Mr Sinnathamby said he was “delighted’’ to partner with R&F to “accelerate the growth of Greater Springfield’’ as an alternative to the Brisbane CBD.
But apartment sales never kicked off and, even as the new road opened for traffic, it was clear that the project had already suffered from substantial delays. Indeed, the R&F website still says “stage one is set to commence in 2019’’.
Mr Zhi, who is based in Melbourne, did not respond to multiple requests for comment this week.
Launched in Guangzhou in 1994, parent company R&F Properties Co. has grown to become a listed property giant and now has interests across China, Australia, Malaysia, the US and the UK.
Billionaire co-founder Zhang Li, one of China’s richest men, made a splash when he entered the Australian market in 2014 vowing to acquire $500 million worth of prime sites across the country.
Yet the audacious undertaking has delivered very mixed results and, more recently, China’s overheated property market has put the group under immense financial pressure. Last month it flagged a $US1.26 billion loss for 2021 as sales slumped.
The most recently available financial report for the Australian arm shows it has not been immune to the downturn, suffering a $39.5 million loss in 2020 and a $22.4 million of red ink in 2019.
Total liabilities exceeded $231 million and, to help compensate, it secured new loans worth nearly $225 million and retained a $351 million line of credit from the parent company, according to the annual report.
The scuttled Springfield project is not the only setback R&F has suffered in southeast Queensland.
The group finished the 20-storey Lotus Tower unit development at Kangaroo Point in 2019 but it then bizarrely sat vacant for nearly two years as no sales eventuated.
Dubbed a “ghost tower,’’ it was sold last year for more than $100 million to a private equity group, which planned to manage the 200 apartments on a build-to-rent basis.
R&F has found success elsewhere in Brisbane, however.
It completed a $500 million three-tower project in the West End in late 2019. Known as Brisbane 1, it has more than 600 units and takes up an entire city block.
The group is also selling housing lots on a 24ha property at Rochedale which it acquired for nearly $40 million in 2017. The “Maison Rochedale’’ subdivision is expected to have more than 230 homes, with completion expected late next year.
Former Brisbane lord mayor Graham Quirk, who now works as an auctioneer, sold the last lot in stage one under the hammer in December for just over $1 million.
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