Property developer Austcorp collapses into voluntary administration

Sydney property development company Austcorp, which is building the $1 billion Vision apartment and office tower in Brisbane, has been placed in voluntary administration with debts of at least $550 million.

Insolvency firm BRI Ferrier now has control of Austcorp Group and Austcorp Funds Management, which is the responsible entity of the listed property fund Austcorp Towers Trust.

Austcorp said in a statement that the collapse was due to the fact that one of the three lenders on the 79-storey Vision tower withdrew their support. The project has been on hold since November.

“As with other companies in the property sector who are experiencing similar challenges, the appointment of a voluntary administrator is the most sensible course of action at this time,” the company said in a statement.

“Austcorp remains optimistic that the Vision project will progress once a restructure is undertaken. They are continuing to talk with interested parties who share their recognition that Vision is a very significant Queensland and Australian project that must succeed.”

There had been speculation that the Vision project could have been one of the first to receive support from the Federal Government’s so-called Rudd Bank, the funding vehicle set up by the Government and big four banks to try to prevent projects falling over if foreign lenders withdrew from Australia.

In March, Treasurer Wayne Swan described the Vision tower as “just the sort of project” for the Rudd Bank, which is formerly known as the Australian Business Investment Partnership.

But BRI Ferrier has indicated that it may still attempt to access funds from the Government to keep the project alive.

The first creditors meeting will be held on 18 May.

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