Partly built properties left precarious after funding crisis forces developer Citadel to halt work

Developer Citadel Property Group has been forced to stall a number of Sydney projects, leaving many partly built properties in danger of collapse, it was revealed this week.

The company claims it has been forced to defer schemes due to lack of funding. Citadel claimed that Capital Finance Australia Ltd approved A$98m (拢42m) for three projects in the city but froze funds after paying only A$31m (拢13m).

The development of a shopping centre and 161 apartments at Berala, 6,000m2 of commercial retail with 100 apartments at Liverpool and 54 apartments at Rockdale have been put on hold.

It is feared that anchors supporting properties at these sites are unsteady and some buildings could collapse. Sources claimed that the Berala site was particularly precarious and an investment of A$1m (拢430,000) would be needed to ensure the safety of the building.

The company has failed to pay subcontractors on these sites and they are understood to have taken legal action against it. Citadel is trying to sell off assets to meet these commitments.

In turn, Citadel is suing Capital in the Australian supreme court, claiming a breach of contract.

The number of postponed projects in Sydney has grown fivefold since this time last year. In 2008 so far, 5,048 projects have stalled, compared with 1,052 projects in the first 10 months of 2007. More than half of these projects are in north-west Sydney.

Topics