CAYDON PROPERTY GROUP COLLAPSES WITH $4BILLION PIPELINE
Another property group, Melbourne developer Caydon, has had receivers and liquidators appointed on Tuesday.
Caydon’s $4 billion pipeline includes the iconic Nylex site development in Cremorne together with apartment projects under construction in Preston, Moonee Ponds and Alphington.
The CEO, Joe Russo, blamed falling property prices, COVID disruptions, cost pressures, supply chain interruptions, and growing interest rates for the collapse.
Caydon’s problems were compounded by the failure of Probuild which was contracted to undertake stage one of the $1 billion development of the Nylex site in Cremorne.
It is understood the development projects in Alphington and Preston won’t be affected by the collapse.
Caydon’s expansion into the US build-to-rent market six years ago was a contributing factor to the group’s demise this week. These projects were structured needing significant upfront financing before they could be sold as multi-unit rental investments.
In a blog post on the Caydon website in June, Mr Russo referenced a 45 per cent rise in building costs in the past eight to 12 months, but said the developer had “addressed these issues with a cool-headed approach”.
Malcolm Howell of Jirsch Sutherland was appointed as liquidator of Caydon Group.