Developer behind $500m project goes under

The developer behind a $500m masterplanned project on the Gold Coast has called in administrators, leaving creditors owed about $80m.

The development company behind a $500m masterplanned project on the Gold Coast has called in administrators, leaving creditors including some of Queensland’s biggest builders owed about $80m.

Nerang Street Pty Ltd, which is developing the Queen Street Village at South Port, had been hit by funding problems as well as the impact of the pandemic on the building industry.

Comment has been sought from Nerang St director David Blanck, who is also boss of Brisbane-based Property Solutions, one of the other backers of the project.

Robson Cotter Insolvency Group, in a report to creditors lodged with ASIC, said Nerang St originally owned nine lots within the project but five blocks had been sold prior to his appointment. Unsecured creditors of the company are estimated at $40.8m, including Brisbane construction firm Tomkin which is owed $16.2m.

“The directors disclosed the main reasons for the company’s financial circumstances included a change in property market valuations, inability to meet funding arrangements and prior to that the general impact of the Covid-19 pandemic,” the report said. Secured creditors including are owed about $43m, including $22m to Hutchinson Builders.

The new Queen Street Village in Southport

Colliers said it is under the instruction of the mortgage exercising power of sale to sell three adjoining sites totalling 5401 sqm at Queen St Village. Colliers’ Steven King said the ‘shovel ready’ site was located in the heart of the Gold Coast’s most active development sites.

The first stage of the village recently opened featuring a Supa IGA supermarket, Dendy Cinemas and specialist retailers. Further developments include two residential apartment towers and a retirement village. Colliers has called for expressions of interest in the parcels of land located at the corner of Nerang St, and Queen St with preliminary approval in place.

Founded in the early 1990s, Property Solutions now has interests in development, funds management and asset management. It is best known for its development activity in Fortitude Valley and near city suburbs of Brisbane including the Centro on James Street, The Barracks at Petrie Terrace and Circa Nundah.

Creditors of Nerang Street are set to meet on September 20 to decide whether to liquidate the company or arrange for a deed of company arrangement. “Some of the secured creditors have taken steps to recover their securities,” the administrators’ report said. “... per my discussions with some of these secured creditors and review of the company’s assets, I estimate that a significant shortfall will be incurred from the sale or recovery of the assets.’

Originally published as Developer behind $500m project goes under