ANOTHER DAY ANOTHER DEVELOPER HIT
Written on the 8 April 2010
YOUNG Land Corporation (YLC) is believed to be the latest Gold Coast developer to cop the brutal effects of a shakedown in the property market.
The developer behind a council approved $750 million master-planned community at Coomera and the 76 ha Keppel Bay Estate at Yeppoon has been forced to scale back its operations.
YLC director David Young did not return calls and the company’s headquarters at 50 Cavill Avenue has been completely vacated. It is believed YLC has moved in with its financial backer LM Investment Management at 9 Beach Road.
Young still owns commercial space at 46 Cavill Avenue. He paid $1.6 million for lot 38 and $2.6 million for a straight line on the fifth floor in October 2007. It was tenanted by Little Beach who has since vacated leaving the entire floor vacant. The Gold Coast's office space vacancy is now at a 15-year record high 23 per cent average.
In central Queensland, YLC’s Yeppoon operations has been streamlined with all sales enquiries taken by PRD Nationwide.
Last year the company signed a joint venture with its Keppel Bay backer LM Investment Management to develop the 105ha One project at Coomera (pictured). It will feature more than 1500 dwellings (apartments, townhouses, terrace homes and detached dwellings on large lots).
LM chief executive Peter Drake, told goldcoastbusinessnews.com.au that the Coomera project is ‘full steam ahead’. So far development has seen the acquisition and amalgamation of 32 individual allotments.
It is understood respective building approvals are now being sought with the first stages of work to commence this year.
LM confirmed that “the only financial relationship LM has with Young Land is as mortgagee on a site in Keppel Bay and that loan is not in default.”
Lots in stage 5 of Keppel Bay Estate have been discounted from $180,000 to $120,000. It is understood that during the downturn, 12 months went by without as much as a single sale in the project. There are nine stages in total.
YLC is the latest in a long line of property developers to be wedged between a rock and a hard place.
No Limit Group, Raptis Group, Larry Matthew, Fish Developments and Ray Group are some of the more high profile Gold Coast developers facing financial hardship as projects are stalled and the banks become increasingly unwilling to continue funding.
Varsity Lakes developer SolMac has had the anchors put on its Park Lake project, but shunned rumours of financial difficulty, citing the project as completely sold and that a completion date for April was on-track.
One Gold Coast property lawyer told goldcoastbusinessnews.com.au that more private developers with exposure to debt would be barrel rolled by the end of 2010.
Industry leaders have called on political leadership to revive the Gold Coast development sector, which has been plagued by retrenchments and a 40 per cent plummet in dwelling approvals from 6884 (2007-08) to 4134 (2008-09).
An industry panel has recommended the rebates only apply to developments where physical work starts within six months of approval and is completed 12 months later.
The group to encourage job opportunities for the 40,000 people directly linked to development, and tens of thousands who rely on it indirectly, in the coming Budget.