Homes under construction hang in balance as Bensons Property ...
Homes under construction hang in balance as Bensons Property Group enters administration
A billion-dollar Victorian-based home builder has entered voluntary administration, leaving more than a thousand homes unfinished and customers in limbo.
Bensons Property Group blamed tough conditions across the construction sector post-pandemic, in which thousands of builders have gone bust.
An unfinished Bensons apartment block in Armadale. The home builder has entered voluntary administration.Credit: Justin McManus
Consultancy group KordaMentha has been appointed administrator, and Bensons said a proposal would be put to creditors to continue trading during and beyond the administration period.
The company said its proposal would protect employees, creditors and customers, and that it would complete construction of more than 1000 homes, valued at $1.5 billion.
Bensons chief executive Rick Curtis said the company had to enter administration in hopes it could continue.
“This was not an easy decision, however, I want to assure our people that there are no plans for redundancies,” Curtis said.
The site of an unfinished Bensons apartment block in Footscray. Credit: Justin McManus
“I also want to assure the hundreds of Australians who have purchased apartments in projects that we are managing that we are taking this action to help protect their interests and the interests of BPG.”
“We currently have a development pipeline worth well over $1.5 billion, and I am confident that we will get through this period and come out of it as an even stronger business.”
Australian Securities and Investments Commission data shows that in the nine months to the end of March, more than 2000 construction companies entered administration and represented the greatest number of company failures, accounting for nearly 27.7 per cent in that period.
According to now-deleted content on Bensons’ website, one of its core values is integrity, stating it will “deliver on our promises, on the homes that we create, which are dependable and reliable, and built on time”.
Property developer Elias Jreissati in 2002.Credit: Viki Lascaris
Bensons, founded in 1994 by self-made developer Elias Jreissati, focused on building large and luxurious apartments blocks in Victoria, Queensland and Tasmania.
This included Chevron One, touted as the first high-rise residential tower on Chevron Island in Surfers Paradise, with 41 levels and 236 apartments.
In Armadale, in Melbourne’s inner south, Bensons’ Society Armadale homes were described as a “private sanctuary” that would “stand the test of time”.
In a statement, Bensons said it believed voluntary administration offered the best opportunity to “get through this period and come back stronger” during an extremely difficult time for developers.
Jarvis Archer, director of insolvency and restructuring firm Business Reset, said this could provide Bensons – which might be working through fixed-price contracts that offer little or no profit due to increased costs – some breathing room.
Bensons have projects in Victoria, Tasmania and Queensland. Credit: Justin McManus
“[Administrators] will assess the company’s business and financial position, identify potential paths for the business to survive and put these options to company creditors to determine the company’s future,” Archer said.
“Bensons will be looking to stabilise its business, maintain stakeholder confidence and reduce its debt obligations to restore business viability.
“Administrators and the company will be looking to continue in a ‘business-as-usual’ manner to do this while they gain an understanding of the best way forward for the company and its creditors.”
High inflation and materials costs have hammered the residential construction industry and led to declining consumer confidence.
Porter Davis, Australia’s 12th-largest home builder, left 1700 homes in Victoria and Queensland unfinished when it went straight into liquidation in March last year. In January this year, builder Montego Homes entered administration.
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