ASX-listed developer Land & Homes Group has entered voluntary administration after being unable to plug the funding gap on a Brisbane project.
Land & Homes acquired 44-100 Barry Parade site in Brisbane’s Fortitude Valley for $20 million in 2016 and planned to develop 491 apartments.
It filed its plans for the site in 2017, detailing two residential towers of up to 26 and 37 storeys with three and four-storey podiums, and 163 one, 304 two and 25 three-bedroom units.
However, the pandemic proved an insurmountable obstacle for development funding, and the company blamed a “high level of fixed costs” with no indication when construction might start.
According to a notice to the ASX this week, Land & Homes said the project was put on hold when Covid hit and its ongoing feasibility was subsequently questioned.
With ongoing price escalation and “no confidence” that construction costs would materially reduce in the short term, Land & Homes found itself in a challenging situation, for which it required “significant capital” which was not readily available.
Despite engaging with several investors to pursue equity funding, it told the ASX, efforts fell flat, as did attempts to sell the project and associated freehold land as indicative offers were determined to be unviable.
The site is listed as for sale and welcoming expressions of interest.
“In the absence of support for equity funding and the non-renewal of the finance facility with United Overseas Bank Ltd, the directors believe that LHM is unable to continue as a going concern and have no option but to place the LHM Group into voluntary administration,” it said in a statement.
Administrators at Hamilton Murphy Advisory were appointed by Land & Home Group’s board of directors to review its financial position.
The writing had been on the wall for LHM for the past year—it had been suspended from trading for the past 12 months and had announced in June that it was seeking expressions-of-interest for its Barry Parade project.
It had re-listed on the ASX prior to launching the development with the support of Singapoean Lian Huat Group.
According to its most recent quarterly accounts, it spent $324,000 on interest and other finance and administration costs, and it reported it had made a $1.5 million loss for the year to June, 2024 with $36 million in liabilities.
Barry Parade is L&H’s only development site—it sold its 2017 Wharf Street site at Spring Hill in 2021.
