Descon Group Australia no longer builder of Iris Capital’s V&A Broadbeach towers development
A billion-dollar tower project has been left without a builder just as it was about to start construction. Here’s what happened:
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A transformative billion-dollar tower project has been left without a builder the same month it was due to commence construction.
Billionaire pub baron Sam Arnaout has parted ways with Descon Group Australia, which was announced in August as builder of the Victoria & Albert towers in central Broadbeach.
Demolition of the site, at the old Niecon Plaza, was finished by Descon last month, and construction of the 40 and 56-floor twin towers was to begin immediately after.
However, all mention of the builder was wiped from V&A’s website last week.
Descon is also no longer builder for Azzura Corporation’s $2.5bn Imperial Towers project.
Descon chairman Danny Isaac confirmed the group was no longer working on V&A, saying it was a mutual decision.
“A decision was made between Iris Capital and Descon Group Australia to go our separate ways, amicably, for both parties,” he said.
“It was a termination for convenience, not for breach and both parties decided to go separate ways.”
Buyers have splashed more than $400m on apartments in the V&A development, by Mr Arnaout’s Iris Capital, at an average price of $2m to $3m.
Iris Capital said the project was almost half sold.
Mr Arnaout said Iris Capital and local project manager Eastview would take on the next phase of works before appointing a builder.
“The Descon phase is complete, no program is lost and it’s business as usual,” he said.
“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.”
Descon is also no longer the contracted builder on Roberto Badalotti’s $2.3bn Imperial Towers project at Southport.
Mr Badalotti’s Azzura Corporation plans three towers, including an 108-storey supertower, planned for the 1.34ha Ferry Rd site.
Mr Isaac said Descon’s price had come in $15m above the developer’s budget.
“The developer is doing it themselves, we couldn’t agree on a number,” he said.
The Bulletin has contacted Mr Badalotti for a response.
Supreme Court lists show Descon Group is fighting statutory demands from three companies, including American Express, builder Purple Hills and trade finance provider Octet Finance.
Asked is his company was solvent, Mr Isaac said “Our net balance sheet at the moment is $300-plus million, audited".
Mr Isaac said all the disputes were resolved on Wednesday.
“There were variations from price escalation and genuine disputes that, as of today, have all been resolved and we are moving forward together positively,” he said.
“(The American Express case) was a genuine dispute over charges on the card, that were not me, exceeding $100,000, which has also been resolved.”
The company and its directors Danny Isaac and Greg Sneeden, was last year embroiled in a bitter falling out with developer Anthony Quinn, who claimed he was owed more than $1m in alleged unpaid wages and losses over a property investment.
In November, Descon announced it had paid $70m for a site in Brisbane riverfront suburb of Hamilton
Mr Isaac said construction on that project would start in August, with its 45-storey 3321 Surfers Paradise Bvd beginning in October.
“This is the projects we’re focusing on with our strong balance sheet,” he said.
“We’re going to use our balance sheet to make our company money rather than working just as a contractor.
“We will still be a contractor, just very selective in this market.”
Apartments in two, three and four-bedroom configurations remain for sale across the Victoria and Albert towers, which will eventually house 122 apartments in the 40-level Albert tower, and 277 apartments in the 56-level Victoria tower.
Albert residences are available from $1.61m and Victoria apartments from $840,000.
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Originally published as Descon Group Australia no longer builder of Iris Capital’s V&A Broadbeach towers development
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