One of the nation's largest property developers, Ralan Group, has gone into voluntary administration, leaving billions of dollars worth of apartment projects in doubt.
The Sydney-based developer owes around $500 million to creditors, including Westpac Bank and Melbourne finance house Wingate.
Administrators Said Jahani, Phil Campbell-Wilson and Graham Killer from Grant Thornton were appointed to Ralan Group and more than 50 of its subsidiaries, which are also in administration.
Founded by William O'Dwyer in 1993, the developer initially focused its efforts on developing, marketing, and managing hundreds of apartments on Sydney's North Shore.
In 2015, it expanded into the Gold Coast market buying the Pellicano families' Paradise Resort for more than $70 million and quickly obtained redevelopment approval for a 1,600 apartments development spread across four towers.
In Sydney, Ralan has developed in Mascot, Burwood, Gordon, Killara and Lindfield as well as in the North Shore suburbs of Turramurra and Warrawee.
Ralan is currently undertaking a development in at Arncliffe in Sydney's southern suburbs, where it is building a 318-apartment project, currently under constriction.
The developers recent site purchases in Sydney included Turramurra where after spending $1.8 million on a 5,900 sqm site, it completed a six level, 83 apartment complex.
Its flagship project the billion Ruby Collection, a $1.4 billion hotel and residential project at Surfers Paradise, planned for four towers spanning from 32 to 60-storeys.
Late last year, Sydney-based private lender Mortgageport turned down loan applications from apartment buyers for the Gold Coast project, following a decline in valuation of up to 30 per cent for some apartments.
The rejection came just as Ralan Group commenced the settlement of the first stage of the apartments.
The administrators said the group owed upwards of $500 million to creditors and had a pipeline of more than 3,000 apartments in the construction or pre-sales phase as well as operating accommodation assets comprising over 600 rooms.
“In terms of the operating businesses within the Group, it is as far as possible, business as usual,” Grant Thornton managing partner Said Jahani said.
“We are working closely with key stakeholders to identify and preserve value for creditors.”
The collapse of Ralan is the latest in a series of builders and developers experiencing financial difficulties as a result of the market slowdown, with Melbourne-based developer Stellar Group placed in receivership in June.
Building approvals have fallen 26 per cent over the past year according to Australian Bureau of Statistics, and are now at their lowest level in six years forcing many developers pull back from new projects in response to a drop in demand.