Investa eyes June to restart stalled Roberts Co housing project
Construction on Investa’s stalled $450 million build-to-rent development in Melbourne could resume by June if a new builder can be appointed to replace failed contractor Roberts Co, which went into administration last month, sources close to the fund manager said.
The decision by Rich List businessman Andrew Roberts to call administrators into his Victorian company shuttered the Footscray housing site as well as separate Craigieburn site where ESR is developing Amazon’s biggest warehouse in the southern hemisphere.
But the developers that have paid subcontractors’ bills since Roberts Co VIC went under – more than $10 million in the case of Investa’s project alone – are hopeful of restarting construction in the next six to eight weeks, one source with knowledge of the negotiations said.
“We want to get back to a productive site,” the person said. “We’re all getting close to appointing new builders. Hopefully, by June we will be actively back on site.”
One issue that remains to be decided is how much Roberts himself will contribute towards restarting the projects which – along with Investa and ESR’s developments included Golden Age’s $180 million 130 Little Collins Street strata office building, originally due to complete next month, and a fourth project for technology BioNTech to build an MRNA manufacturing facility at La Trobe University’s Bundoora Melbourne campus.
Two of the projects – those of Investa and Golden Age – were projects Roberts Co took over in 2022 from collapsed contractor Probuild as a way to expand into Victoria.
After ceding control of the Victorian company to McGrathNicol administrators Jason Ireland and Matthew Caddy, Roberts has no formal responsibility for it.
In addition, the separate announcement last week that he will sell the Roberts Co NSW parent company suggests an exit from construction completely by the man whose father John founded contractor Multiplex – and who made the family’s fortune by selling it to Canada’s Brookfield.
That didn’t prevent him from putting funds in to help the projects get started again, another person close to the negotiations said.
“He’s still the shareholder of the ultimate parent company so he will continue to help where he can in that capacity,” the person said.
Another person who works for one of the developers agreed, but wasn’t optimistic about getting money back.
“Andrew should have an absolute moral obligation,” they said. “I’ll believe it when I see it.”
Roberts Co’s Victorian arm went into administration owing more than 100 trade creditors up to $50 million in debts – mostly current progress claims – creditors were told last month.
Andrew Roberts declined to comment. A source close to Roberts Co Australia, the parent company, which is not in administration, said, however, that he had offered ways to help the projects get back on track.
“The shareholder has offered support to complete the projects for those four particular clients,” the source said.
“Each client is expected to make their own decision as to which way to go – whether to use the shareholder-backed proposal or go with a third-party builder in the next couple of weeks.”
The failure of the contractor had knock-on effects for many clients.
“We stopped other things in the pipeline and focused on this,” said an employee of a different developer.
“We had to speak to every subcontractor to learn what was the status of their contract with Roberts, what was complete and what was outstanding.”
Further disruption, or an extended delay to resuming work, could push more subcontractors under, extending a run of failures that has pushed insolvencies up 17 per cent year-on-year already.
Figures corporate regulator ASIC published this week put construction industry insolvency appointments for the financial year to April 13 at 2795, up from 2398 at end-April last year.
Total insolvencies across the economy are up more, however – suggesting other industries are suffering failures at a faster rate than construction – rising 31 per cent from a year earlier to 11,489 for the financial year to date.
Developer Golden Age said it was committed to completing its Melbourne CBD office tower project as quickly as possible.
“The development team are working closely with more than 30 subcontractors who have been involved with 130 to ascertain the final works to be done,” a spokesperson said. “The aim is to have all the contractors back on site ASAP.”
