The future of a $500million Gold Coast development is uncertain after a Queensland developer has called in administrators with creditors owed $83 million.
Brisbane-based Nerang Street Pty Ltd is the firm behind the half-billion dollar Queen Street Village project on the site of the former Gold Coast Hospital in Southport.
But rising costs, the falling property market and complications caused by Covid have plunged the project into crisis.
The company has now been placed in the hands of administrators who will meet with creditors to decide the future of the company.
The company owes around $40million to unsecured creditors, including large building firm Tomkins which is owed $16.2million by Nerang Street.
Secured creditors are owed a further $43million and include locally based building companies.
The first stage of the Queen Street Village complex has been completed (pictured) but the rest of the project, including residential and retirement towers on the Gold Coast site, hang in the balance as the building entity calls in administrators
The half-billion-dollar project masterplan had visions for public spaces alongside dining, retail, and residential facilities
One of Australia’s biggest private builders, Hutchinson Builders, is owed more than half that amount after lending the firm $22million.
The company, directed by David Blanck and Alex Crooke, is now in the hands of the Robson Cotter Insolvency Group.
The pair are managing director and financial controller respectively of company Property Solutions one of the backers of the project.
Both have been contacted by Daily Mail Australia for comment.
Both directors of the embattled company work for Brisbane-based Property Solutions (pictured)
The company behind the project Nerang Street Pty Ltd (pictured) however have been pushed to the brink following changes in building material markets, Covid-19, and troubling funding arrangements
Following a meeting with creditors, the group outlined the reasons for Nerang Street’s financial strife in a report to creditors, reports news.com.au.
The group suffered from 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 revealed.
The company will have further meetings with creditors next week but the administrators have warned there could be a ‘significant’ shortfall in any sale or recovery of the company’s assets.
The luxury development (pictured) sits on the site of the old Gold Coast Hospital which was completely demolished to pave way for the project
The company owned nine lots of the project in 2018, but has since sold five of them it was revealed.
Some creditors have already begun recovering securities.
Further meetings will decide whether the company is liquidated or a deed of company arrangement is prepared.
Nerang Street were engaged in building the Queen Street Village development on the old Gold Coast Hospital lot.
The masterplan had the site slated to become a mixed-use urban development featuring a central plaza, retail and dining space as well as residential and commercial aspects.
The site is a 3.2-hectare lot bound by Queen Street, Nerang Street and Little High Street.
‘Due to the size and nature of our integrated master planned community, our vision for this development is to rejuvenate the area and inject life back into the former Gold Coast Hospital site for Southport,’ Mr Blanck had said ahead of stage one and two of the development.
The long-awaited first stage of the project opened recently after months of Covid, weather and shortage induced delays, reported the Urban Developer.
A gym, food court, cinema and supermarket have all been opened in the development.
The plans for the further building of a $120million vertical retirement village were green-lighted earlier this month.
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