Multi-billion dollar property developer collapses

PHOTO: Caydon Property Group

Caydon Property Group in hands of receivers citing impact of Covid lockdowns
The Melbourne-based developer is behind a number of high-profile projects
It was redeveloping the famous Nylex site at Cremorne in the city’s inner-east

Yet another property and construction group has gone to the wall blaming the effects of the Covid-19 pandemic, with receivers appointed to Caydon Property Group.

The multi-billion dollar Melbourne-based property group is behind a number of high-profile projects in the southern capital, including the redevelopment of the Nylex landmark at Cremorne in the city’s inner-east.

Non-bank lender OCP Asia, which holds security over Caydon’s assets and properties, appointed receivers McGrathNicol on Tuesday, the Australian Financial Review reported.

The receivers will deal with completed residential and commercial property, sites under development and land holdings of Caydon, founded by managing director Joe Russo 20 years ago.

Caydon Property Group was behind the redevelopment of the Nylex landmark at Cremorne in the Melbourne’s inner-east

Caydon Property Group founder Joe Russo blamed Melbourne’s ‘prolonged’ Covid-19 lockdowns plus the escalation in construction costs, supply chain delays and rising interest rate pressures as among the reasons for going into receivership

Two projects still under construction, HOME in Alphington and Due North in Preston, will proceed to completion and settlement despite the insolvency, according to the receivers.

Mr Russo blamed Melbourne’s ‘prolonged’ Covid-19 lockdowns plus the escalation in construction costs, supply chain delays and rising interest rate pressures as among the reasons for going into receivership.

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‘Since the inception of Caydon we’ve delivered some amazing projects, including over 3000 apartments, hotels and offices, all of which I am immensely proud of,’ Mr Russo said.

‘Sadly, over the last few years, Caydon has had to deal with one difficult market situation after another. The latest and really confronting challenge we’ve been facing has been the pricing factors affecting the Australian property and construction industry.

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‘The significant disruption to our business created by two years of Covid-19 lockdowns in Melbourne has caused business uncertainty and severely impacted sales.’

‘The significant disruption to our business created by two years of Covid-19 lockdowns in Melbourne has caused business uncertainty and severely impacted sales,’ Mr Russo said

Spiralling material costs, choked supply chains, fuel and vehicle price hikes, difficulty finding staff, and high wages were all combining to destroy the viability of some Australian construction and development businesses