Updated
A $40 million property development in Adelaide — which was spruiked as a “new benchmark for energy and sustainability” — has been scrapped after apartments sat on the market for more than 18 months.
Key points:
- Buyers were told construction would be completed by late 2019
- They were told the development had been scrapped on Thursday
- The $40 million project included 68 “luxury apartments”
Buyers who had put down a deposit for an apartment in The Standard, at Bowden, north of Adelaide’s CBD, were told their contracts had been terminated yesterday.
It follows the demise of a string of South Australian building companies, including the ODM Group, Platinum Fine Homes, Tudor Homes and JML Home Constructions, which have all recently collapsed.
The Standard, by South Australian developer Arcadian Property, was made up of 68 luxury apartments — including one two-storey, three-bedroom penthouse valued at more than $900,000.
The eight-storey project would have been built on Gibson Street, adjacent to Plant 4.
In a letter to buyers, Arcadian Property director Warwick Mittiga said it was “with great disappointment” that the development would not proceed.
“We have sought to achieve satisfaction of all contract conditions as quickly as possible since commencement of sales in this project to allow construction and delivery of the project to commence,” he wrote.
“Unfortunately, due to a number of factors we do not believe it will be possible to deliver the project in the timeframe required under the contract.
“We have pursued every opportunity available to us to deliver the project however without success.
“I appreciate this outcome may be extremely frustrating for you and I share that frustration as developer.”
The development would have included 60 solar panels, making it energy efficient, and formed part of Renewal SA’s $1 billion Bowden redevelopment project, aimed at transforming the old Clipsal industrial precinct.
It is the first development in the Bowden redevelopment to be scrapped.
When it was launched, Arcadian Property stated apartment owners would benefit from “an unprecedented energy arrangement” with Savant Energy Power Networks that would lock in a 27 per cent discount on electricity consumption charges for five years.
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Construction was meant to be completed by late 2019 — but the land is still an empty lot.
Buyers have been told they will get their deposits back with interest.
Rachel Dryden, who put down a deposit in January last year, said she was disappointed with the outcome as it set her dream of owning property back by almost 18 months.
She said at the time she was told that construction would start within six months.
“I live across the road from the block so I was waiting, I guess, to see some action happening and nothing did,” she said.
“I know things get pushed back so I was expecting that a little bit and at the end of last year, they emailed and called us to say they would be fulfilling the contract.
“We hadn’t heard anything since — until now.”
In a statement, a Renewal SA spokesperson said it would work with buyers “to discuss how living in Bowden can still be a reality” within one of the other developments currently in progress.
“Importantly, no other developments are affected within the Bowden project,” she said.
“Almost 1,000 people call Bowden home, with over 550 homes having already been completed, 21 development sites sold to date and more than 690 apartments and townhouse sales having been achieved.
“Currently, 168 apartments are under construction and a further 41 homes are due to commence construction within the next 12 months.”
A spokesman for Arcadian Property said Mr Mittiga was interstate, but confirmed the project would not proceed.
Following the collapse of several SA building companies, Master Builders SA chief executive Ian Markos said low population growth, reluctant bank lending, planning laws and inefficient land release had created a perfect storm.
Topics: construction-projects-and-equipment, building-and-construction, industry, business-economics-and-finance, adelaide-5000, bowden-5007, sa
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