One of Melbourne’s newest and fastest growing privately-held developers is suffering a fall-from-grace – and substantially revising its building strategy.
Steller, directed by Nicholas Smedley (pictured, top), the son of ex-Spotless and Arrium chairman Peter Smedley – who died last month, is understood to be experiencing construction funding woes, with developments across the board on ice.
In response to questions about speculation the group entered voluntary administration, a spokesperson said it is taking “proactive steps to downsize certain arms of the business to suit current market conditions”.
It added plans “to significantly ramp up” operations across its retirement and aged care portfolio.
“The Steller Group is aligned with a number of key strategic financial partners which continue to finance a number of current and future projects within our portfolio,” a statement said.
“Their continued support is the backbone of the Steller group and allows us to be nimble and respond to market conditions as they arise.
“Despite the current state of the market, Steller remains very optimistic about the future of its retirement living and aged care portfolio and sees immense growth opportunities in these sectors” (story continues below).
The Caulfield East based builder acquired a number of residential development sites in 2016 and 2017 – the latter considered to be the peak of that property cycle.
Amongst them was 200 Wells Street, South Melbourne, for which it paid $23.4 million. It outlaid $16.5m on a Hampton block, too.
It also acquired the former Greyhound Hotel site at 1 Brighton Road, St Kilda, as a permit-ready apartment project, paying $7.5m.
Attempts to sell this property last August for about the same price were unsuccessful.
In November, 2017, Steller co-invested in Sorrento’s Continental Hotel and late last year commenced construction of a high-profile refurbishment and extension, said to be cost $80m.
The first stage of the redevelopment – with a hotel, wellness centre and apartments – was set to open in five months.
“Our focus over the next two to five years remains our fast-growing retirement and aged care living portfolio,” the developer added.