About one third of units in Caydon’s Home development in Alphington remain unsold

About 130 unsold apartments and a derelict cache of land in Melbourne among the largest assets from Caydon Group’s collapse.

Artist impression of the Home by Caydon development in Alphington.

The biggest assets emerging from the collapsed Asian-backed property developer Caydon Group are around 130 unsold apartments plus a high-profile cache of land in the Melbourne suburb of Cremorne.

As receivers McGrathNicol sort through the ashes of the collapsed development group, which entered liquidation on Monday, it is understood around 100 of the 320 apartments in Caydon’s Home development in Alphington which is expected to complete in August remain unsold.

While another 30 or so apartments are still for sale in the 107-unit Due North development in Preston which is not due for completion until March.

Receivers McGrathNicol are expected to recommend Caydon’s sales team remains in place to continue to market the product. Sources said apartment prices which range from $593,000 to $699,000 will not be reduced.

The only other major Caydon asset is a significant land bank in the Melbourne suburb of Cremorne where Caydon was developing a $1bn commercial precinct at the site of the old Nylex silos.

Property Developer Caydon ran a tour of the Nylex Clock redevelopment in Cremorne. Picture: Alex Coppel.

The Nylex site is the developer’s biggest asset and has development approval for commercial and retail projects, after it originally paid $38m for it in 2014.

In the last grasp bid to bolster its finances, Caydon in March tried to drum up institutional interest for the next stage of the planned office precinct, where it had hopes of developing a $400m complex.

The once-dilapidated property incorporates the historic malting silos and already houses other office buildings. Caydon is well-progressed on the precinct, dubbed the Malt District, and has already finished one office tower, which is now occupied by MYOB. It was sold off to French investment company AXA.

Caydon‘s collapse could see a new developer buy the site which can accommodate an office development of about 30,000sq m.

The project was offered to market this year without a tenant and winning precommitments has become harder although office markets are recovering. Inner-city Cremorne is a hotspot for new office towers and a new developer could resuscitate the project.

Nearly 30 entities associated with the Caydon Group, which employed around 20 staff and had been operating for around 15 years, were placed in liquidation on Monday, with the company blaming the challenges they encountered across the pandemic, supply chain disruption, the softening residential market, interest rate hikes and difficulty sourcing labour.

Sources said there was no figure yet on how much creditors are owed and no likelihood of a deed of company arrangement.

“There is no exit strategy as the companies are in liquidation,” said the source. “There will be an orderly realisation of the assets.”

Asian lender OCP Asia appointed McGrathNicol as receivers earlier this week.

The Caydon collapse comes as several developers have pulled the pin on apartment projects in Perth and the Gold Coast in the past week.

Caydon also has a project on the Gold Coast at Miami, just south of Mermaid Beach. It planned a boutique 18-level tower with just 51 apartments on The Esplanade.

While the two sites outside the receivership – in Alphington and Preston – are fully funded and will be completed, the future of other projects is being assessed. The financier on the Gold Coast project was CVS Lane.

Caydon also built up a series of developments across US cities and these assets may also be hit by the local company falling into administration.

Mr Russo, who founded Caydon in 1999, had projects in Houston and San Francisco. Caydon last year called in CBRE to sell Houston‘s Drewery Place, a 27-storey multi-family tower, which it developed in 2019.

Caydon was planning another tower, called Fitzroy, with that 32-storey tower to have 191 condominiums and a 190-room boutique hotel run by Kimpton Hotels and Restaurants. All up, Caydon was planning to develop three city blocks in Houston.

In San Diego, it was planning the Theatre House development, which was to be atop the historic New California Theatre. A boutique hotel, bar and restaurant with up-market touches like a rooftop pool were also planned but it was reported earlier this month to have abandoned this scheme.