Beachcroft: construction wrap protects what's been built so far. Photo / supplied
Beachcroft: construction wrap protects what's been built so far. Photo / supplied
Construction has stopped on a partly-built $85 million Auckland apartment scheme, now described as being "on hold".
Matt Currie of Crux Partners, which is now project managing the 85-unit Beachcroft Residences in Onehunga, said builder Teak Construction Group was leaving with units partly finished and buyers were being sought tocomplete the homes.
Deposits were taken from 2017 and building started in 2018 but the project, by Erson Developments, has been dogged with difficulties.
"All construction work has ceased and Teak Construction Group will now begin the process of demobilising from site," Currie said today.
Erson said the termination of the contract was because of Erson's issues "and is not due to any default or failure by Teak".
Plans for Beachcroft, now partly finished and without a builder. Photo / supplied
Currie said: "It is with considerable disappointment that Erson Developments has decided to place the construction of the partially completed Beachcroft Residences apartment development on hold."
The project had faced several delays primarily relating to completing the design and securing the necessary consents.
"These delays, combined with current market conditions - particularly considerable historic and projected cost escalation - mean that Erson no longer has sufficient financial resources to take the project through to completion," Currie said.
"It will shortly be seeking expressions of interest from other developers who may wish to acquire and complete the development."
Beachcroft's social media showed work on the site previously. Photo / supplied
Erson's shareholders Anne and Bruce Clegg said they "deeply regret any loss or inconvenience this situation may cause to the purchaser and any other affected parties".
The Cleggs had lived and worked in the community for more than 40 years. They started Beachcroft intending to develop new homes for themselves, friends and family, Currie said.
Currie and Mark Taylor, of Rawa Property, set up Crux Partners this month to project manage the development "with a view to identifying the various issues with the project and attempting to address them" until a buyer is found.
Beachcroft: construction wrap protects what's been built so far. Photo / supplied
Currie said they would try to secure the best possible outcome for the project and all stakeholders.
Asked if any of the companies involved were going into administration, liquidation or receivership as would often be the case when problems hit building sites, Currie said that was not the plan.
"No. Due a variety of circumstances, Erson Developments does not have the financial capacity to complete the project. With the support of its financier, Erson Developments is looking to find a buyer who can take the project through to completion," Currie said.
Apartment buyer funds were held in a solicitor's trust account.
Extensive views: pictured when Teak was working on the site. Photo / supplied
About 50 of the 85 units had been pre-sold but Currie refused to say how much money had been taken from buyers to date.
"The building has been wrapped to provide protection against the elements. The superstructure of the building is completed, and the roof has been installed. Sales of the apartments commenced in 2017 and were put on hold in early 2021 given the ongoing delays," Currie said today.
All contractors, subcontractors and consultants were paid up to date. There was no dispute with Teak, he said.
But the project had taken significantly longer to design and consent than Erson had originally contemplated. That has caused significant delays which have cost implications, particularly in a market where construction costs are rising rapidly, Currie said.
"Subject to completing the design and consent process, engaging a main contractor and dealing with any supply chain issues we estimate that the project could be completed in approximately 18-24 months."
