A two-year wait to begin work on what will be Liverpool’s tallest tower has led to construction budget increases of up to 20 per cent, according to the developer.
Sydney-based developers Fyve will break ground next month on its 34-storey mixed-used tower, almost two years to the day they were approved for the $200-million project.
But Fyve managing director Amen Zoabi says the two-year wait—largely driven by concerns over Covid—has seen the construction budget escalate by 20 per cent.
“Absolutely, costs have escalated,” Zoabi said.
“What we are finding challenging at the moment is the rate of increase of the sale of apartments has not kept up with the rate of increase and escalation in construction costs, so there is pressure on that.”
Zoabi said he’d told sub-contractors to look beyond China for supply solutions.
“We’ve had a lot of pressure on some of the other jobs we’re delivering with regards to that because our suppliers who rely heavily on China have not been able to get any product.”
Zoabi said they were exploring supply pipeline alternatives out of Vietnam and Turkey.
“Vietnam is something of an emerging market, but Turkey opens up a different market all together in regard to some specific materials we are looking for,” he said.
“So we are looking for a plan to mitigate the risks—we don’t want to be at the mercy of just one supplier.”
Known as The Liverpool, the 120m project on Elizabeth Street in the heart of Liverpool will comprise 193 apartments, a 93-key hotel, 6500sq m of commercial space and a range of ground-floor retail tenancies.
The architects are Rothelowman, and Binah Construction—a sister company of Fyve—will handle the build. It will be the seventh project in Liverpool for Zoabi and his business partner Khalil Hafza; the two cousins grew up in the area.
Zoabi said the community had generally been accepting of the height of the building. The developer’s biggest issue with height was with the flightpath of the nearby Bankstown Airport, which led to the design being reduced by a single storey.
The area will eventually be serviced by the $5.3-billion Western Sydney International Airport, due to open to passengers in 2026. The project is also close to Liverpool Hospital, Western Sydney University, University of Wollongong’s south-west campus and Liverpool TAFE.
The 1.2ha site was acquired by a syndicate—which includes Zoabi and Hafza— for about $8 million around 2014. It then went through a rezoning process to allow for mixed-use.
A range of one, two and three-bedroom apartments will sit across levels 10 to 33. The apartments go to market this week, with one-bedrooms starting around $400,000 and a high-end two bedroom on an upper level selling for about $700,000. However, Fyve say they are not relying upon pre-sales to begin construction.
“We are committed to starting the project mid-August. Our view is that by the time our equity contribution towards the project is used up, we will have enough pre-sales to then get the right funding partner on board to make sure the project gets to completion,” Zoabi said.
Zoabi said they were in discussions with a Melbourne-based hotel operator and expected to sign a contract to manage the hotel within three weeks.
Construction is expected to take about two years.
