[+] Developers On the Tools Amid Builder Drought

“It’s time for us to roll up our sleeves.”

No stranger to doing some heavy lifting, Andrews Projects sales manager Sarah Andrews grew up on building sites and spent school holidays in the back of her parents’ car nursing carpet and benchtop samples. 

Her builder-developer father Danny Andrews has built scores of houses, industrial sheds, shopping centres and medium-density apartment developments across the Gold Coast during the past two decades. 

And now he’s firing up the tools alongside Sarah and son Jordan to build their most ambitious project yet, a $270-million, 299-apartment masterplanned community at Robina.

While so many other DA-approved sites are gathering dust amid a growing builder shortage in Queensland, Andrews Projects is one of a new breed of developers who are taking the bull by the horns to start up their own construction arm. 

“We were working with a builder but the cost ended up being too high. So we set up our new construction company at the start of July, we’ll have better control of our costs now,” Sarah Andrews says. 

“We’re still mapping out what we need (in terms of labour), but we’ve made some significant hires already. It’s a natural progression for us. 

“It’s control of your destiny and control of your work program.”

▲ The 299-apartment masterplanned community at Robina is the developer’s biggest project yet.

Cascade is Andrews Projects’ biggest development to date at a scale which Andrews says is not likely to be repeated. 

“We have a finite amount of developable land, we have the beach on one side, and the mountains on the other. The only answer is to go up,” she says. 

“[Cascade] is such a big piece of land.

“We settled on the site in January last year. The DA was approved late last year and we are hoping to be on site late this year or early next year.”

New data from PRD demonstrates just how dire the builder drought is in Queensland, particularly in the fraught high-density residential sector. 

The risk profile is not appealing for many of the nation’s biggest builders, including Queensland’s own Hutchinson Builders.

According to PRD, more than a third of the 196 residential projects worth over $10 million slated for construction in south-east Queensland’s between January 2022 and 2024 do not have a builder assigned.

As well, more than half the Gold Coast developers with projects in the pipeline are waiting to secure a builder, and about a third of projects in Brisbane are experiencing the same problem.

▲ Sales manager Sarah Andrews says they have made some key hires for their construction firm and will grow further once on site at Robina.

But it’s not for lack of buyer demand on the Gold Coast, according to Sarah Andrews. She says she has kept a list going for seven years of all the projects that have been shelved on the Gold Coast. 

“It’s really hard to get projects out of the ground,” she says.

“If your site is not DA-approved and you don’t have a builder, you can’t go to market without a lot of weakness or vulnerability.

“We’re directly employing a team of people, there will be a site team and an office team … and the team will continue to grow once we get on site.”

And while labour hire has been constrained in the past two years, Andrews says the market is shifting on the Gold Coast. Andrews Projects plans to run its construction arm, A Construct, indefinitely as it pads out its future pipeline.

“To my knowledge I think there’s only been one build contract get off the ground this year. A lot of those subcontractors who have been absorbed in projects will be looking for work.

“We’ve got a tunnel vision for the Gold Coast. I think it’s moved out of the traditional boom-bust cycle … I think it’s got a stronger foundation.”

▲ Buyer demand remains strong on the Gold Coast. Andrews Projects’ Beach House broke price-per-square-metre records at Broadbeach.

Andrews Projects joins a growing list of developers to launch their own construction arms after the high-profile collapse of ConDev last year and, more recently, GCB.

And non-bank lenders are rallying to the cause. 

Holden Capital’s Dan Holden told The Urban Developer the specialist non-bank lender sees the developer-builder structure as a benefit.

“Historically, the traditional banks have seen it as a high risk and been quite reluctant to be involved because if there is a problem, then they see it as having two problems instead of just one.

“Whereas, we actually look at it as a benefit, particularly at the moment with material costs and labour costs being the hardest thing to manage. If there is a problem, then you’ve got visibility, and you can solve it quickly.”

You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.