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Dexus Hits Back at Grocon Claims

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Property giant Dexus has publicly responded to Grocon over a disputed outstanding debt of $28 million.

The fallout between two of Australia's best-known property companies occurred last year after Dexus demanded repayments of debts relating to Grocon's 31-level 480 Queen Street tower in Brisbane over a period of three years.

Grocon has called in FTI Consulting as voluntary administrator of two Grocon units that it was said were inactive in order to slow legal efforts by Dexus.

Dexus has now responded, claiming that it and Grocon had entered into an agreement to restructure and extend the payment terms, but that Grocon had not complied with the agreement.

▲ Dexus alleges it is owed rent and lease payments related to the 480 Queen Street office tower it purchased from Grocon in Brisbane.
▲ Dexus alleges it is owed rent and lease payments related to the 480 Queen Street office tower it purchased from Grocon in Brisbane.

“Grocon has had debts outstanding to Dexus and a funds management partner for more than three years relating to a lease of premises at 480 Queen Street, Brisbane,” Dexus said in a statement to the ASX.

“Grocon entered into several binding agreements to repay the debt owed and had not complied with these, despite repeated requests to do so and Dexus granting extensions to the scheduled payment dates.

Dexus issued statutory demands on Grocon seeking to have the debt paid and Grocon challenged these in court alleging abuse of process.

“It should be noted that Dexus did not commence proceedings against Grocon,” Dexus said.

Dexus took Grocon to the Federal Court in Victoria in February and the two parties were due to go to the Federal Court of Appeal next month.

Dexus said it had adhered to court processes and the next hearing was slated for November 22. Dexus expects judgment to be handed down soon after the hearing.

Grocon last week placed two subsidiaries—Grocon Constructors (Qld) and Grocon Constructors (Vic)—that owed Dexus into voluntary administration.

Grocon, which has multiple business arms, said the decision to appoint administrators to the two entities would not affect its broader operations.

Listed fund manager Dexus has said it will continue its focus for on new financial year to maintain a high occupancy across the group's portfolio and to move ahead with the $9.3 billion of projects in its development pipeline.

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Article originally posted at: https://theurbandeveloper.com/articles/dexus-hits-back-at-grocon-claims