Administration of Gold Coast GCB Constructions could impact housing supply, prices

The administration of GCB Constructions could cause massive problems for future projects, piling further pressure on a troubled market, industry leaders say.

The administration of GCB Constructions could see future projects likely to be delayed or cancelled due to a lack of capable builders, placing further pressure on demand and prices, industry leaders say.

The Varsity Lakes-based building company went into administration on Wednesday, leaving construction of more than 500 apartments in limbo and untold debts to suppliers and subcontractors.

About 60 staff of the Varsity Lakes based company, which also has premises in Lismore, were told of the administration and terminated.

Among the subcontractors expected to lodge a claim against the company is Tim Stylianou of Atlas Stainless, who’s spent two decades working in commercial fabrication and installation.

Mr Stylianou said the situation left many subbies feeling disillusioned by the industry.

“You fight to win the work, you fight to do the work, then you fight to get paid for the work,” he said. “Or you don’t get paid at all.”

GCB Construction site at 309 Golden Four Drive Tugun. Picture: Glenn Hampson

Another subbie, who claims they’re owed about $20,000 by GCB, said they didn’t expect to get the money back.

They said early warnings about GCB’s financial struggles had allowed them to stop work and limit their losses.

“We will be one of a large group of subcontractors and small businesses that will lose money from GCB going under,” the subcontractor said.

“Lucky for our business the loss will only be in retentions owed from about a year ago as we stopped doing work for them.

“Even though we will take about a $20,000 hit from GCB going under, and that’s never a great feeling, it came as no shock to us.”

Property Council Gold Coast committee chair Lisa Murdoch said the impact of the administration would have wider implications than just GCB’s current projects.

“It will have an impact on supply in that the projects GCB was working on are going to take longer to come into supply,” she said.

“The bigger issue is that we’ve lost another builder in that very small pool which are capable of those large scale residential projects.

“Hutchies are out there but they’re not taking on any new work.

The Property Council’s Gold Coast committee chair Lisa Murdoch.

“There are public projects coming online and a lot of private projects are being put on hold, simply because they can’t get a builder.

“It’s one thing to say bring builders from southern states to do it, but it’s a catch-22 because we can’t house these people while they’re doing the work.

“It is a tricky situation.”

Ms Murdoch said banks and other development financiers should be looking at ways to take on more of the financial risk for big projects.

Administrators David Stimpson and Adam Kersey of SV Partners were appointed to pick through the finances of GCB Constructions, which is subject to multiple court actions for alleged unpaid debts, including a wind-up application.

Mr Stimpson said GCB had two QBCC project trust accounts, which are supposed to protect funds for specific projects for the benefit of suppliers and subcontractors.

GCB Constructions Vantage View apartments at Benowa. Picture: David Clark

Mr Stimpson was unable to disclose any amounts held in them and was still tallying an estimated shortfall for creditors.

“The figures we have are as at June 30,” he said.

“Progress claims are received monthly from the 20th so there are still lots of progress claims coming in (from subbies) and progress claims going out (to principals).

“We’ve got GCB staff coming in (Friday) to do that processing, so hopefully we’ll have a clearer idea around mid-next week.”

GCB was working on the fifth tower in the $200m Vantage project at Benowa; $51m Cote Palm Beach; Si Bilinga and the $182m Marine Quarter Development, at the northern end of Southport’s Broadwater Parklands.