The pandemic has caused all sorts of issues for the construction industry, but inflated costs will be a lingering issue in the future as we deal with the Covid hangover.
Property developer Fyve is feeling the effects of the pandemic as it looks to kick off construction on its 34-storey mixed-use complex at Liverpool, dubbed The Liverpool. The developer estimates construction costs have increased by 20 percent in the past two years and will finally break ground on the site in August.
“Absolutely, costs have escalated,” Fyve Managing Director Amen Zoabi tells The Urban Developer.
“What we are finding challenging at the moment is the rate of increase of the sale of apartments has not kept up with the rate of increase and escalation in construction costs, so there is pressure on that.”
“We’ve had a lot of pressure on some of the other jobs we’re delivering with regards to that because our suppliers who rely heavily on China have not been able to get any product.”
Fyve has been forced to look to other overseas markets as alternatives to China.
“Vietnam is something of an emerging market, but Turkey opens up a different market altogether in regard to some specific materials we are looking for,” Zoabi says.
“So we are looking for a plan to mitigate the risks—we don’t want to be at the mercy of just one supplier.”
The Liverpool is located on Elizabeth Street and will comprise 193 apartments and 93 hotel rooms, as well as 6,500 sqm of commercial floorspace and a ground floor retail precinct. The tower has been designed by Rothelowman and has been created with the future Western Sydney International Airport in mind. Given its location within the Liverpool CBD, it sits in close proximity to Liverpool Hospital and the Western Sydney University campus in the suburb.
“We are committed to starting the project mid-August. Our view is that by the time our equity contribution towards the project is used up, we will have enough pre-sales to then get the right funding partner on board to make sure the project gets to completion,” Zoabi says.
Fyve anticipates that it will find a hotelier by the end of the month. The developer’s sister company Binah Construction is tasked with building the precinct, with completion expected in 2024.
Images: Rothelowman
