Construction Pain Prevails as Teetering Coast Builder Topples

By last Friday the fighting words had given way to a portentous silence.

After more than 40 years making its mark on south-east Queensland and northern NSW urban landscapes, besieged Gold Coast-based builder GCB Constructions was on the ropes.

And with the company facing a fresh flurry of court actions, its boss Trent Clark—the son of builder Greg Clark who laid the foundations for the firm in 1981—sat down with insolvency specialists from SV Partners.

“We basically had a discussion about the pros and cons and what was involved and how it would all unfold,” SV Partners’ David Stimpson told The Urban Developer.

“And I guess he thought about it over the weekend and then contacted me on Monday.”

They met again on Tuesday this week and later that same day the Queensland building regulator suspended the licence of GCB Constructions, citing “failure to pay debts when they fall due”—breaching the minimum financial requirements for licence holders.

Effective immediately, the suspension meant the company was unable to undertake any building work, including the construction it had in progress on developments comprising more than 500 apartments.

One industry source described it as the final turn in what had been “a slow death roll”.

A little under 24 hours later—just after noon on Wednesday—GCB Constructions appointed Stimpson and SV Partners colleague Adam Kersey as administrators.

“I think that certainly accelerated the appointment,” Stimpson said. “I'm not sure whether it accelerated it by a matter of hours or days but it was fairly inevitable once that occurred.”

It followed conditions being imposed on GCB Constructions’ licence in late June by the Queensland Building and Construction Commission—prohibiting it from providing tenders, quotes or entering into any new contracts for building work without QBCC approval as well as requiring it to provide a list of debtors and creditors weekly.

Stimpson said that only moments before speaking to The Urban Developer he had emerged from a meeting with about 60 staff from GCB Constructions.

“They’ve been formally terminated and, obviously, they’re disappointed and upset,” he said.

He said it would be at least a couple of days before there was any indication of the number of creditors affected and amount of debt owed by the company.

“It’s day one and essentially we’re just going through the process of securing assets, working out what we have by way of projects and seeing what we can do to minimise the fallout and see if we can recover funds for creditors.

“We’ve got a team here crunching the numbers at the moment. It’s very rubbery because final claims probably haven’t come in. So it’ll be a couple of days before we know what the debt is.”

In a written statement, the administrators said the company was considering putting a proposal for a Deed of Company Arrangement to creditors. Meanwhile, a report to creditors was expected to be issued on Friday before a creditors meeting on August 7.

It also indicated the appointment of administrators had occurred “primarily due to disputes relating to two major construction projects on the Gold Coast”. The projects were not identified.

“We will be working with the developers to transition projects to new builders, consciously minimising any loss to subcontractors,” the statement said.

Among the builder’s workbook was Rayjon Group’s $200-million Vantage project at Benowa (pictured below), Buildcap’s $180-million Marine Quarter development at Southport (pictured above), Steer Developments’ $51-million Côte Palm Beach and GDI Group’s Drift Residences tower at Main Beach.

Only a few months ago, GCB Constructions was appointed builder of Brisbane developer Aria Property Group’s recently upscaled Kangaroo Point apartment tower project, The Canopy.

Speculation over the financial stability of GCB Constructions—listed as a category 6 builder with an annual allowable maximum revenue ranging up to $240 million—had been rife for months.

An industry source said that due to the number and size of its projects the fallout from the company’s collapse into administration could be “worse than Condev”—referring to the demise of another Gold Coast builder as the construction crisis took grip early last year.

“This is bad and there’s going to be carnage … a lot of subbies are going to be feeling a lot of pain,” they said. 

ASIC figures show insolvencies in Australia’s beleaguered construction sector soared 72 per cent to 2211 in the 12 months to June 30, up from 1284 in 2021-22.

The writing was on the wall for GCB Constructions.

Construction of 50 retirement living apartments and clubhouse that it was building at Yamba on the NSW north coast came to an abrupt halt in October last year. Since then, there have been no trades on site and work has not recommenced.

In May this year, Canberra-based Amalgamated Property Group took over construction of its $160-million Amaya project at Broadbeach on the Gold Coast from GCB Constructions.

The move came at the same time it was reported work had stopped on a number of GCB Constructions' sites with subcontractors downing tools and claiming they had not been paid.

The builder also has been locked in a legal stoush with Chinese-backed developer Poly Global over a $196-million 243-unit and townhouse development at Ascot in Brisbane.

Another dispute with developer Buildcap over the delivery of its twin tower Marine Quarter project was settled out of court.

As well, GCB Constructions has been facing multiple court actions from suppliers, including a wind-up action from a recruitment company. Five more companies recently joined the wind-up action.

Nevertheless, as early as last week the fighting words were still coming from Clark.

He had insisted to the media the company was still “a long-term viable business” and he was “determined and confident” of overcoming the challenges that had been hampering its operations. Then silence.