$500m tower scrapped by major Aussie developer

Duncan Murray

July 19, 2022 – 9:12PM NCA NewsWire


SOURCE : https://tinyurl.com/pacificone

Cost blowouts in the construction industry have claimed another victim with a major half billion dollar development scrapped.

Shortage of workers main…

Master Builders Australia CEO Denita Wawn says “resolving the people shortage” in the construction industry is the main concern at the moment. “That is really where the crunch is,” she told Sky News Australia. “We desperately need more people in this country working. “We need to resolve those skills shortages.”

A developer has scrapped plans to build a $500 million apartment tower on the Gold Coast, citing spiralling construction costs.

Melbourne-based Central Equity will not go ahead with it’s 56-storey Pacific One tower in Surfers Paradise, saying global supply chain turmoil had made it unviable.

“The company feels strongly that it is better to move proactively now, when faced with such economic turbulence,” the company said in a statement.

“The malaise facing builders, including staff shortages and supply chain disruption, has resulted in the unprecedented escalation of construction costs for developers, making Pacific One economically unviable.”

Pacific One would have featured 486 apartments starting at $650,000 each.

Artist impression of the $500 million, 56-storey luxury Pacific One supertower planned by Melbourne-based developer Central Equity.

“The decision was not a demand-side issue, and all deposits will be returned to buyers and prospective buyers,” the company said.

Construction was expected to start on the project this year and wrap up in 2024.

It is the latest in a series of setbacks for Queensland’s construction industry that has included the collapse of several local developers and home builders.

It’s also another sign of further trouble with the Central Equity warning unit prices must rise by 20 per cent to cover mounting costs.

The Pacific One Gold Coast showroom was quiet on Tuesday after the tower was canned. Picture Glenn Hampson

However, projects have stalled before on the site at the corner of Frederick Street and Garfield Terrace.

The same company was initially planning to build the premium Luxe Private Residences in 2008 which was scuppered by the GFC and later launched an expanded 47-level version which also failed to proceed.

“Central Equity commenced P1 planning after the GFC and before Covid, the company grew significantly during that time and they wanted to make a larger project than originally anticipated for the site,” Central Equity said.

The company said it had completed 80 high rises during which time it had dealt with a range of market factors including the GFC, recessions and rising interest rates.

“The current post-Covid construction and supply chain issues are unprecedented in the 35 years Central Equity have been in business. They are not simple challenges to adjust to,” it said.