Queens Wharf tower deposits refunded as three-year delay announced
Investors in a luxury tower at Queens Wharf have been refunded millions of dollars in deposits, with interest, after the developer confirmed the project faces three-year delays.
QLD Business
Don't miss out on the headlines from QLD Business. Followed categories will be added to My News.
A luxury tower block developer, who suddenly terminated millions of dollars of contracts, has refunded anxious investors their deposits with interest.
Investors in the 75-storey Queens Wharf Tower 5 apartments, part of the Star Casino precinct, received their deposits back this week with around 4 per cent interest.
The refunds brought relief for those who feared the developer would be unable to refund the deposits and were told it would take a minimum of 30 days to return the money.
All 819 investors had stumped up 10 per cent deposits three years ago, with the luxurious three-bedroom sky apartments originally hitting the market at prices starting from between $3-$3.5m.
Fears swept through the investors when developer QWB Residential Precinct Operations terminated contracts in December and reissued the units to the market at a 12.5 per cent premium stretching out the new completion date from 2026 to the end of 2029.
The developer informed investors it had added an additional four storeys but with only an extra 6.9m to the tower’s overall height.
A spokesman for the developer said in a statement on Tuesday, that no apartment heights in the tower, including the new four storeys, would be reduced with “design tweaks made elsewhere”.
The developer also claimed it had no option but to relaunch the scheme to increase revenue to support the development.
It also alerted new investors to an increase in the body corporate fees to $10,643.48 for the first 12 months.
“More than 460 people re-signed Queen’s Wharf Tower contracts, including five on Tuesday, and those who have opted not to re-sign have begun receiving their deposits back with interest as per ANZ Bank’s standard rates and terms,” a QWB spokesman said.
A unit investor, who declined the offer to re-sign, said he was satisfied with the refund process, despite only receiving a 4 per cent return on a capital outlay of about $400,000 over two years.
The investor estimated earning “more than $20,000 in interest” since making the deposit despite other investment opportunities in the booming Brisbane property sector earning more than 8 per cent over the previous two years.
“The deposit, which had been held for nearly two years, accrued approximately 4 per cent annual interest — a figure reflecting government regulations limiting how developers can invest buyer deposits,” he said.
“Off-the-plan developers are restricted to Australian bank deposits for holding funds.
“The interest rate of these deposits dictates what purchasers receive, unless the contract is cancelled – which is what happened.
“I’m glad to have the deposit refunded and will reinvest in other opportunities at the Gold Coast.
“I wasn’t under pressure to reinvest in the project, and my partner wasn’t keen on city living, so the way it turned out works for us.”
A spokesman for the development said nearly half of the investors have re-signed contracts at the higher 12.5 per cent asking price.
HWL Ebsworth Lawyers, who set up the escrow trust account for the deposits last year, told buyers the developer had invested the deposits and it would take time, possibly 30 days, to recover the funds and return to buyer bank accounts.
The development spokesman said any delay in returning the deposits and interest were due to having to abide by a minimum notice period with the bank holding the deposit funds, which was usually a 30-day period in line with APRA rules.
Under APRA and Queensland regulations, off-the-plan developers are restricted to only Australian banks for investing deposits.
Under the regulations, the developer is entitled to the return on those deposits unless they cancel the contract.
Returns are set by the interest rate on the bank’s deposit account.
Queen’s Wharf Tower 5 was launched for sale in March 2022 and it became the fastest-selling residential tower in Queensland’s history.
At that time, the anticipated construction completion date was November 2026.
However, the developer said after significant global economic forces along with a 46 per cent increase in construction costs across the Brisbane construction market, the deadline would be pushed back to mid-2029.
Specific issues including rapid, unprecedented and unanticipated escalations in construction costs and severe shortages of materials, and a lack of labour were blamed.
One tower is already completed and the 667 owners are preparing to move into the luxury accommodation before April.
Veteran builder collapses with $20m debt as last-ditch rescue fails
A veteran Queensland builder has collapsed with debts topping $20m after a rescue plan from its directors failed to materialise, leaving several major projects in limbo.
Third time unlucky: Why Taco Bell failed to take off in Australia
It failed to expand down under in the ’80s and ’90s, and now Taco Bell’s most recent attempt to break into Australia has again flopped. So, why didn’t it ever take off?