Multi-billion dollar Melbourne property developer Caydon collapses blaming Melbourne Covid lockdowns

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Multi-billion dollar property developer collapses blaming Melbourne’s Covid-19 lockdowns and rising interest rates for creating a sales slump

  • Caydon Property Group in hands of receivers citing impact of Covid lockdowns
  • The Melbourne-based developer is behind a number of high-profile projects
  • It was redeveloping the famous Nylex site at Cremorne in the city’s inner-east 

Yet another property and construction group has gone to the wall blaming the effects of the Covid-19 pandemic, with receivers appointed to Caydon Property Group.

The multi-billion dollar Melbourne-based property group is behind a number of high-profile projects in the southern capital, including the redevelopment of the Nylex landmark at Cremorne in the city’s inner-east.

Non-bank lender OCP Asia, which holds security over Caydon’s assets and properties, appointed receivers McGrathNicol on Tuesday, the Australian Financial Review reported. 

The receivers will deal with completed residential and commercial property, sites under development and land holdings of Caydon, founded by managing director Joe Russo 20 years ago.

Caydon Property Group was behind the redevelopment of the Nylex landmark at Cremorne in the Melbourne’s inner-east

Caydon Property Group founder Joe Russo blamed Melbourne's 'prolonged' Covid-19 lockdowns plus the escalation in construction costs, supply chain delays and rising interest rate pressures as among the reasons for going into receivership

Caydon Property Group founder Joe Russo blamed Melbourne’s ‘prolonged’ Covid-19 lockdowns plus the escalation in construction costs, supply chain delays and rising interest rate pressures as among the reasons for going into receivership

Two projects still under construction, HOME in Alphington and Due North in Preston, will proceed to completion and settlement despite the insolvency, according to the receivers.

Mr Russo blamed Melbourne’s ‘prolonged’ Covid-19 lockdowns plus the escalation in construction costs, supply chain delays and rising interest rate pressures as among the reasons for going into receivership.

‘Since the inception of Caydon we’ve delivered some amazing projects, including over 3000 apartments, hotels and offices, all of which I am immensely proud of,’ Mr Russo said.

‘Sadly, over the last few years, Caydon has had to deal with one difficult market situation after another. The latest and really confronting challenge we’ve been facing has been the pricing factors affecting the Australian property and construction industry.

‘The significant disruption to our business created by two years of Covid-19 lockdowns in Melbourne has caused business uncertainty and severely impacted sales.’

'The significant disruption to our business created by two years of Covid-19 lockdowns in Melbourne has caused business uncertainty and severely impacted sales,' Mr Russo said

‘The significant disruption to our business created by two years of Covid-19 lockdowns in Melbourne has caused business uncertainty and severely impacted sales,’ Mr Russo said 

Spiralling material costs, choked supply chains, fuel and vehicle price hikes, difficulty finding staff, and high wages were all combining to destroy the viability of some Australian construction and development businesses

Spiralling material costs, choked supply chains, fuel and vehicle price hikes, difficulty finding staff, and high wages were all combining to destroy the viability of some Australian construction and development businesses

Mr Russo said the company would work closely with the liquidator to ‘minimise any disruption’ to stakeholders.

The receiver said it would work to achieve ‘the best possible outcome’ for all parties involved by exploring options for development and/or disposal of Caydon properties

The collapse follows on from a raft of recent insolvencies among Australian builders.

Spiralling material costs, choked supply chains, fuel and vehicle price hikes, difficulty finding staff, and high wages were all combining to destroy the viability of businesses.  

Builders Privium and BA Murphy were both liquidated late last year, while major construction companies Condev and Probuild also went broke earlier this year.

Hotondo Homes, Inside Out Construction, Dyldam Developments, Home Innovation Builders, ABG Group, New Sensation Homes, Next, Pindan, ABD Group, Pivotal Homes, Solido Builders and Snowdon Developments are some of the other companies in the sector to go under.

 

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