Under-Pressure Bensons Vows to Deliver 1300 Apartments

Property developer Bensons Property Group says it will complete its $1.5-billion development pipeline across three Australian states despite entering voluntary administration.

The company is reportedly managing more than 1300 apartments.

Craig Shepard and Sebastian Ham of KordaMentha have been appointed as administrators, while Keith Crawford and Matthew Caddy of McGrath Nicol will oversee operations as receivers and managers.

Under a proposed restructuring plan, the company intends to protect employees, trade creditors and apartment purchasers while delivering its existing projects.

In a company statement, Bensons said the voluntary administration “only relates to BPG and does not extend to any other entity within the broader group”.

The statement said that “all projects currently being managed by BPG, many already under construction, would not be affected”.

The Melbourne-based developer’s portfolio includes Chevron One, a 41-storey tower with 236 apartments on the Gold Coast’s Chevron Island, valued at $485 million.

Other developments include Society Armadale in Melbourne’s inner south; Montpelier House in Hobart with 21 homes, each valued up to $9.28 million; and 740 apartments across Melbourne’s suburbs with a total value of $452 million.

Some are completed, others are under construction or are awaiting sales processes before work begins.

BPG managing director Rick Curtis said the decision to enter voluntary administration was driven by challenges in the post-pandemic construction sector, including higher interest rates and increasing construction costs.

▲ The now-completed Chevron One tower on the Gold Coast.

Founded by Elias Jreissati in 1994, Bensons joins a growing list of Australian developers facing financial difficulties.

According to ASIC, construction companies are the largest kind of company collapses across all sectors in 2023-24.

Jarvis Archer, director of insolvency firm Business Reset, said the administration could provide breathing space for Bensons, particularly if it was working through fixed-price contracts affected by increased costs.

“Administrators and the company will be looking to continue in a ‘business-as-usual’ manner while they gain an understanding of the best way forward for the company and its creditors,” Archer said.

The announcement follows several significant industry failures, including Porter Davis Homes’ collapse in March of 2023, which left 1700 homes unfinished across Victoria and Queensland.

The construction sector continues to face pressures from labour shortages, rising material costs and industrial disputes, with Master Builders Australia reporting that 59 per cent of total working days lost in the economy during the September quarter occurred in the building and construction industry.

ASIC data shows construction companies represented nearly 28 per cent of all Australian business failures in the nine months to March 2024, with more than 2800 firms entering administration during this period.