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Very sad news, but not unexpected. Rumours have been going aorund town now for 18 months.

'Ambitious' Vision blurred from the start

Brisbane Times | Shannon Molloy | November 5, 2008

A plan to build a 79-storey skyscraper in Brisbane's CBD was too ambitious for both the developer and the River City, senior industry figures have claimed.

Austcorp this week announced it would suspend construction of its Vision Tower project on Mary Street, citing the global credit crisis and a failure to negotiate financial backing.

The news following several months of industry speculation that the developer was ill-equipped to deliver the $1 billion tower, which would have been the tallest and Brisbane and second tallest in Australia.

It is understood Austcorp was unable to meet the strict conditions imposed by its foreign financiers, which results in the collapse of credit arrangements.

Grocon, which was to construct the skyscraper, is believed to have pulled out of its agreement because of mounting concern over Vision's finance.

A senior development figure, who asked he not be named, told brisbanetimes.com.au that the iconic building was never a sure thing.

"Banks require a number of things when providing large amounts of finance... healthy pre-sales, a certain level of liquidity and a good track record," he said.

"Austcorp was trying to build a Shanghai building in Brisbane... it was never going to work."

While the developer often touted its sales record at Vision, a number of the contracts had been signed in the project's early stages in 2005, making the luxury apartments an investor's dream.

The significant difference between current CBD property prices and those of three years ago meant the agreements were far from profitable for Austcorp, especially in light of spiralling construction costs.

However, early investors were unwilling to budge on their "bargain" contracts.

In another blow to the developer, it is understood several more recent multimillion dollar contacts have collapsed this year.

Austcorp has dismissed speculation about the building's future and insists it will eventually proceed with construction when economic conditions improve.

However, industry sources say a cloud of doubt still hangs over the mammoth project, especially in light of market conditions.

One senior Brisbane property figure said the future of the site remained unclear and believes the current economic turmoil could see it sit dormant for some time.

Excavation of a seven-storey basement is expected to be turned into a public car park until Austcorp makes a final decision.

Selling the site, which would be the fourth change of owner in the past decade, is likely to be a difficult task, sources said.

A spokesman for Austcorp refused to comment on the claims made to brisbanetimes.com.au today.