Don’t Overreach Before Games, Veteran Warns Gold Coast Developers

“Don’t bite off more than you can chew.” Because the next six years to the 2032 Brisbane Olympics will be unforgiving and brutally expose any developer on the Gold Coast who does. That’s the blunt but measured warning from longstanding Glitter Strip developer Danny Andrews. And the irony is not lost on him as his family’s namesake company mobilises its in-house construction team to deliver the $900-million South Beach twin-tower development at Surfers Paradise—its biggest development to date. Not to mention the news of US President Donald Trump’s family inking a deal to build a 91-storey branded hotel and apartment supertower in the same neck of the woods. “We’re bullish in what we do … this is our hometown, and so we know what you can do, and we’ve worked our way up to this,” Andrews says. “It looks glamorous from the outside but it’s a tough game … you’ve got to be substantial in the current environment. “And if you don’t have the experience, the local knowledge and aren’t well-capitalised, you’re kind of walking into a bit of a war zone.” His advice: “Just bite off what you can chew”. “Scale needs to be relative to what your experience is and what your bank balance is. If you push that in any way, you’re going to have pressure points in your business model that may not survive,” Andrews says. And above all, he adds: “You’ve got to have your own construction team”. Olympic’s double-edged sword Talk of a looming reckoning in the Gold Coast highrise development market persists as South-East Queensland faces the Olympics’ double-edged sword—the longer-term gloss from hosting the global event tempered by the more immediate convergence of severe supply and labour constraints as the Games build and a record pipeline of government-backed projects ramps up. For the moment, however, tower project launches continue, development applications keep rolling in and developers from near and far are still staking their claims along the fast-growing urban coastal strip. ▲ Andrews has now broken ground on its South Beach twin-tower project 100m from the beach at Surfers Paradise. “It can’t all get built,” Andrews tells The Urban Developer . “We don’t have the resources here.” He points to a couple of well-publicised large-scale projects in which millions of dollars have already been sunk, yet delivery remains uncertain. And while the battle for construction talent across the city’s development sites is already fierce—it is only expected to intensify. “There’s people running around trying to poach my staff every week,” Andrews says. “‘How much do you want? How many cars?’... every week they’re getting phone calls.” Those constant attempts, he says, are now part of the ever-increasing background noise for any developer with a capable delivery team in the region’s Olympics-charged development landscape. South Beach is the latest of the Andrews family’s portfolio of Gold Coast multi-residential projects that now number in the teens. It broke ground on the 5700sq m site fronting Surfers Paradise Boulevard earlier this month. The Bates Smart-designed scheme comprising two 37-storey towers will accommodate 394 one, two, three and four-bedroom apartments plus 5500sq m of wellness amenities. “We couldn’t do this without having our own construction now,” Andrews conceded at the sod-turning ceremony. “If we weren’t the builder, I don’t even know if I’d be involved or having this conversation.” How to beat the poachers And therein lies why he bets against the lure of short-term offers of higher wages and extra perks by over-investing in culture, support and staffing levels. “We have work environments and support that they’re not going to get if they go somewhere else,” Andrews says. “We’re layered. We probably over-staff our sites because we realise the challenges.” He contrasts that with past experiences where external contractors ran its projects on what he calls a “starvation diet of personnel” model where burnout and turnover were inevitable. “If you run construction sites off a sniff of an oily rag, your guys will walk.” ▲ Renderings of Andrews' 229-apartment Cascade development now under way at Robina on the Gold Coast. The developer-builder structure also allows tighter control over build costs, timelines and staffing—and is a key to its current project being priced below some nearby competition with units starting from $925,000. “Down the road they’re selling for 23 per cent more than what we are, and it should be around the other way,” Andrews says. “They’re an offshore company … they have to pay whatever the retail price is for construction, and they bake that into their retail pricing. That typically would not work in tighter markets.” By contrast, Andrews is able to deliver what he calls a “world-class development” two streets back from the beach at a clear discount to the sharpest end of the beachfront market. “Beachfront is $25,000 to $30,000 a square metre. We start at $14,000 a square metre and go to $18,000 a square … and we’ve got what I believe is the best development with the best amenity in Queensland, if not Australia, and it’s only a 100m walk to the beach.” Looking ahead, he says the supply-demand gap will widen as smaller, under-resourced groups fall away, particularly those who rely entirely on external builders and thin margins. Meanwhile, the developer is deploying its own capital and sticking to disciplines honed over multiple cycles since entering the Gold Coast market during the global financial crisis. ““The game isn’t going to get easier,” Andrews says. “So we just try to run our own race.” On interest rate rises and inflation, he is unflinching. While acknowledging ongoing “upward pressure” and the potential for further rate hikes, he sees demand for the family’s current project as resilient. “I don’t have any negative thoughts in relation to how it could impact us, because what we are putting together here … is priced very competitively. We probably won’t have anything left to sell in 12 months,” Andrews says. As for other developers eyeing the Gold Coast's skyline over the next few years, his message is simple and cautionary: “Don’t try to be a hero”.

Don’t Overreach Before Games, Veteran Warns Gold Coast Developers

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