More property projects collapse as credit dries up

The credit crunch continues to wreak havoc in the property sector, with a $360 million rail project in Sydney and a $100 million luxury Gold Coast apartment development the latest projects to hit trouble.

The credit crunch continues to wreak havoc in the property sector, with a $360 million rail project in Sydney and a $100 million luxury Gold Coast apartment development the latest projects to hit trouble.

The $360 million redevelopment of the Chatswood railway station in Sydney is in tatters after the business unit of property company CRI Australia, which was running the project, was placed into receivership owing more than $150 million.

The project includes a large retail complex, three residential towers and a transport interchange. Commonwealth Bank, the main financier on the development, put the CRI division into receivership.

The bank is owed $125 million, with Babcock & Brown reportedly owed around $35 million mezzanine funding.

CRI blamed the financial slowdown and “certain commercial aspects of the project” for the receivership.

North of the border on the Gold Coast, the $100 million Jade luxury apartment project is in jeopardy after the company developing the project, Bezzina Builders No. 2, was placed into liquidation.

Bezzina Builders No. 2 is owned by high-profile Sydney tycoon Mick Bezzina.

According to The Australian Financial Review, building company Superior Walls & Ceiling last week lodged an application in the Queensland Supreme Court to wind up Bezzina Builders No. 2. Steven Kugel of restructuring company CRS Warner Kugel was appointed as liquidator by the court.

Related stories:

• Gold Coast property developer Raptis Group on the brink
• Credit crunch claims Queensland finance company Asset Loans Group