Overview
Western Construction & Development Pty Ltd was the developer behind a townhouse and civil works project that was in significant financial distress at the point of Olvera's appointment. Construction was approximately 10% complete, with cost overruns and a lack of funding to continue having brought the project to a standstill.
Olvera was appointed as Receivers and Managers on 15 November 2021, with the primary objectives of stabilising the project, securing the funding needed to complete construction, and implementing an effective realisation strategy for both the completed townhouses and any residual land.
Challenges
- Near-Greenfield Starting Point: With construction only 10% complete at appointment, the Receivers effectively inherited a project at its earliest stages, requiring a full reassessment of build quality, costs to complete, and project viability before any forward strategy could be committed to.
- Cost Overruns and Funding Gap: The project had already consumed resources beyond its budget, and no funding was in place to continue. Securing alternative finance was a prerequisite to any construction activity and needed to be resolved at pace to prevent further deterioration of the site and project value.
- Construction Quality and Compliance: Multiple defect assessments and consultant reviews were required to establish a reliable picture of build quality and compliance, ensuring that work already completed would not need to be revisited at additional cost.
- Dual Realisation Strategy: The engagement required two distinct exit strategies to be developed and executed concurrently, one for the completed townhouses and a separate approach for the residual land, each with its own valuation, marketing, and disposal considerations.
- Ongoing Financial Control: Managing drawdowns, monitoring cash flow, and maintaining budget discipline across a long-running, multi-stage construction and sales process required sustained rigour over an extended engagement period.
Our Approach
Following appointment, the Receivers engaged a project manager, quantity surveyor, builder, and selling agent to assess the current state of construction, prepare defect and completion reports, and manage any necessary rectification works. Multiple site inspections and consultant reviews were conducted to verify build quality and establish confidence in the works already completed.
A detailed cash flow and cost-to-complete analysis was undertaken to provide a clear foundation for financial control and transparency. The Receivers then secured alternative funding to enable construction to recommence and be carried through to completion, and formulated a sale strategy encompassing both the finished townhouses and the residual land.
Throughout the construction phase, the Receivers implemented disciplined budget monitoring and cash flow management, controlling costs and managing drawdowns efficiently. Close coordination was maintained with the builder, project manager, quantity surveyor, and agents at every stage of the program.
With construction progressing, the Receivers developed and launched a sales campaign for the completed townhouses, including marketing coordination and agent engagement, alongside a separate strategy for the residual land covering valuation and disposal options.
Results
Key Drivers of Success
- Early engagement of specialist consultants and a rigorous defect and cost-to-complete assessment established a reliable foundation for the completion strategy, preventing costly surprises later in the program.
- Securing alternative funding at an early stage was decisive in enabling construction to recommence and be seen through to completion, transforming what was effectively a stalled greenfield site into a fully realised residential development.
- A dual realisation strategy, developed and executed in parallel for both completed townhouses and residual land, ensured every component of the asset was brought to market in a considered and value-maximising way.
