As the construction industry manages market complexities ranging from regulatory compliance to labour, strategic foresight and resilience are crucial for sustained growth. Olvera Advisors’ comprehensive report offers valuable insights into the challenges, trends, and strategies shaping the future of the industry.
Over the last years, the construction industry has faced a number of challenges, ranging from lengthy building approvals, rising material costs, and labour shortage. Despite this, businesses in this space continue to make headwinds and find innovative ways to navigate market forces.
The construction trade has never been more volatile, and companies must be equipped with the latest dynamic trends to guide their decision. Olvera’s report is built upon extensive research and decades of advisory experience within the industry, suitable for all construction companies and stakeholders.
The industry employs over 1.35M people, second only to healthcare.
Building and construction accounts for 10.8% of the nation’s GDP making it the 5th largent sector.
There are currently 448,451 construction businesses in Australia. 98% of them are small businesses.
Trade apprentices in the construction sector account for 47.6% of the economies apprentices.
Builders and construction businesses perform over $280B worth of building and construction work each year.
Every $1 million worth of building activity supports around 3M in activity across the country.
The construction industry is at a critical juncture, as complex labour, material, and regulatory changes create a myriad of challenges.
Yet, we see certain opportunities take place which may yet shape the future of the industry. We hope this report will serve as a guide for all industry stakeholders to build actionable insights and stay prepared for the months ahead.
Appointed Receivers and Managers over eight blocks (or stages) of land in the Salt Development.
The appointment was by the Pacific Alliance Group (Hong Kong) who had the top secured debt. Pacific Alliance Group appointed an agent in Australia called in the Winton Group which managed large parts of the Receivership.
The Receivership involved devising realisation strategies or the remaining uncompleted land development stages. As the receiver, we successfully engaged consultants to assist us to amend the construction certificates for the development stages and to develop and subdivide the remaining development stages. The subdivision was successfully remarketed and resulted in a very impressive realisation value of the land stock. In addition, we were able to successfully apply the GST margin scheme resulting in an increased return to the secured creditor.
Kingscliff
Strategy Execution
September 2021
Tom Hedley sold his Hedley Hotel Group to Coles Myer in 2006 for $328 million.
The Queensland portfolio counted 35 hotels, 102 retail liquor outlets, and sites for a further 17 botteshops, significantly boosting Coles’ expansion.
Tom Hedley went on to form Hedley Leisure and Gaming later renamed Redcape Property Group (RPG), and operational entity Hedz, which worked 12 of Redcape’s assets.
Hedley Construction was a group of development entities based out of Cairns which designed and built low rise residential accommodation. It also held a controlling state in Redcape Hotel Group which owned.
Olvera principals worked with the company owner Tom Hedley on a restructure of his entire group and its facilities with ANZ Banking Group.
Hedley Construction
Strategy Execution
September 2021
Olvera Advisors were engaged by a hedge fund out of Hong Kong to assist with the realisation of a significant commercial loan that was in default.
Wija leased vacant land site in Chatswood that had a 99-year term. The Development Application on the land stipulated that it was to construct a 10 storey mixed residential/commercial complex within a specified timeframe.
Unfortunately, Wija did not commence the project within the time frame and consequently a breach notice was issued by the respective local Council which gave the secured creditor 6 months to rectify. Before the notice period expired, Olvera Advisors were Appointed as receivers. As receivers, we disputed the right to terminate the lease. In particular, we consider that the lessor was not allowed to terminate without giving the secured creditor 6 months to rectify the breach. To rectify the issues, we commenced proceedings seeking from the court for relief against Forfeiture and the leaseback and damages.
After nearly 12 months of legal proceedings, both sides are irresolute in the stance. All offers made by PAT to settle (including significant compensation) are rejected by the lessor.
Receivers receive an unsolicited offer from an interested party offering to purchase the property for a significant sum with the intention of building out the existing DA.
Olvera Advisors as receivers then entered into put and call option with the interested party and were able to resolve litigation at the mediation and sell the lease and generating a significant return to the secured creditor.
Wija Civic Plaza
Strategy Execution
September 2021
Robyn’s inclusion in the Olvera team brings an added 15 years of expertise in corporate reconstruction, insolvency, and forensics.
Damien develops strategic solutions for groups dealing in crisis management and/or distress investment.
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