Condev calls on developers for financial lifeline to avoid collapse

The future of Queensland construction giant Condev hangs in the balance with key developers asked to throw a financial lifeline to the struggling firm. FULL LIST OF PROJECTS

Up to $1bn worth of construction projects in Queensland are hanging in the balance as construction giant Condev calls on developers to throw it a financial lifeline.

There are growing fears that Condev, which has hundreds of millions of dollars worth of projects underway across southeast Queensland, could be the latest major building company to fail adding to the growing woes in the sector.

Condev presented developers with a proposal on Monday afternoon that will reportedly involve helping the company offset a “perfect storm” of labour shortages, floods and supply chain issues that has seen construction costs surge 25 per cent over the past 18 months.

Cronin Miller Litigation partner Derek Cronin, who is acting for Condev, said the developers had been asked to respond to the proposal as soon as possible. “The meeting was positive and constructive,” said Mr Cronin.

A Condev spokesperson said the company was solvent and had “cash in the bank” with all subcontractors paid for their work.

According to the Queensland Building and Construction Commission, Condev, which employs 125 people, is licensed to complete projects totalling $240m each year making it one of the biggest construction firms in the state.

Condev’s problems come only weeks after the collapse of Melbourne-based Probuild leaving scores of unfinished projects around the country.

Queensland’s largest construction union has described Condev as a “collapse waiting to happen.” The Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) claims Condev’s business model was flawed and had left it vulnerable to market headwinds, including rising material costs and recent floods.

CFMEU state secretary Michael Ravbar said a “combination of underbidding on jobs, poor project management and quality control” meant Condev was “a collapse waiting to happen”. A Condev spokesperson declined to comment on the union’s claims.

Rivière project at Kangaroo Point.

Subcontractors were seen removing tools and equipment from Brisbane’s Kangaroo Point on Monday morning where Condev is building a 12-storey, 124 apartment high-rise for the Aria Property Group. Trucks were parked on the footpath outside the Rivière development in Main St with workers loading gear and materials into the back.

The meeting today, attended by 15 major developers from all over Australia, discussed how projects can be completed without causing further financial loss to Condev.

WTC Advisory managing partner Andrew Weatherley said he had heard that Condev had “some challenges”. He described the meeting with developers as a “unique approach”.

“The alarm bells have rung and they might find people hesitant to deal with them going forward which would compound the problem,” Mr Weatherly said.

“But from a developers point of view, if it was not a substantial amount of money it would make sense to support them to a point because of the delays that you’d suffer because the clients have to find another builder to complete the projects.

“Whether that is sufficient enough remains to be seen.”

Condev, which helped build much of the 2018 Commonwealth Games infrastructure, has 18 projects currently under construction in southeast Queensland, with 14 on the Gold Coast.

The Gold Coast projects are valued at more than $500m alone worth hundreds of millions worth of projects in Brisbane,

Condev was founded in 2002 by Steve and Tracy Marais.

Ms Marais said the company was still solvent but needed help to navigate an increasingly hostile environment in the building sector.

“We are seeking a resolution and we cannot do that alone – we need to work together,” she said. “This is not something the building industry is renowned for but it would be in the best interests of all parties, our clients and our staff.

“There is nothing more important than a resolution and I guess that depends on what that looks like.”

Workers at Condev's Kangaroo Point project on Monday. Photo: Glen Norris

Ms Marais said over the weekend that all subcontractors had been paid to date and she was confident the Gold Coast-based builder could survive with the support of clients, staff and subcontractors.

Condev, which last year reported a loss, told staff and clients that recent flooding had impacted its ability to complete projects and was “the straw that broke the camel’s back”.

“We have prepared financial projections in order to understand our current and future cashflow, and on the basis of those projections have sought legal advice,” the company said in an email. “We cannot do this alone and we need the support of all stakeholders.”

Condev Projects

- Cannes Waterfront, Surfers Paradise

- Zupps Commercial Building, Ormeau

- The Brooke Residences, Varsity Lakes

- Natura, Burleigh

- Brake St, Burleigh

- Jindi Apartments, Palm Beach

- 15 Ward St, Southport

- 41 Ward St, Southport

- Allure, Chevron Island

- St Hilda’s, Southport

- One Cannes, Surfers Paradise

- Alegria, Palm Beach

- Capital Court, Varsity Lakes

- BMW, Southport

- Minnippi Quarters, Carina

- Riviere, Kangaroo Point

- Stanford and Oxford, Dutton Park

- Shoreline Queens Beach, Scarborough

Originally published as Condev calls on developers for financial lifeline to avoid collapse