28 May, 2024

AV Jennings pull out

City of Moreton Bay Mayor, Peter Flannery, has called on the Queensland Government to “get serious” about the housing crisis, following a decision by AV Jennings to terminate Waraba development plans.

AV Jennings pull out - feature photo

The decision came due to cost blowouts, with AV Jennings saying it had no choice but to scrap the plan to build 3500 homes in the area.

“There is no doubt that infrastructure and development costs have increased - we’re seeing that across the board,” Cr Flannery said.

“However, we will not meet State Government mandated housing targets if a pipeline of catalytic infrastructure is not prioritised now.

“City of Moreton Bay has done the planning and we know what we need to manage impending growth.

“We have 12 growth fronts, but all of these are in underdeveloped areas.”

Cr Flannery said the land couldn’t be turned into housing without infrastructure.

“Developers need certainty. They can’t just sit on paddocks and wait for their day in the sun,” he said.

“It’s all well and good for the State to mandate growth targets for councils but they need to support that growth.

“That is why we have been calling on the State and Federal Governments to expedite funding for key infrastructure now.”

Describing Moreton Bay as “south-east Queensland’s fastest growing city”, Cr Flannery said “we expect better and will hold the State to account when their budget comes down in June”.

In a statement, AV Jennings said the company had spent several years progressing the Rocksberg Development Approval (DA) as part of unlocking the Option with finalisation expected in late CY2024.

“As the DA process has progressed, material changes from the Company’s initial assumptions about what was required to deliver the Project emerged,” the statement said.

“Expected development and infrastructure costs have increased significantly since the Option was entered into and have not been matched by increases in forecast revenue.

“The extended length of time until meaningful returns could be expected to flow to the Company would put significantly greater pressure on the Company’s balance sheet than originally contemplated.”

The statement said management had worked closely with the landowner and other key stakeholders recently to negotiate a restructure of the agreement to the satisfaction of all parties, but that an agreement had not been reached.

“Whilst the decision to terminate the Option was a difficult one, the Board believes it is in the best interests of the Company and its shareholders,” the statement said.

“As a result of this decision, the Company will write off capitalised development expenses of $17.2 million and its lots under control will reduce by 3500.”

It remains to be seen what the landowner plans to do, following AV Jennings’ withdrawal from the project.

When completed, Waraba is expected to provide about 30,000 homes for about 70,000 people.


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