Conquest seizes 800-home Sydney site from Crown Group’s collapse

It’s also the latest example of how opportunities are being thrown up in the development sector as tighter credit conditions and soaring debt costs push weaker players to the brink.

Crown Group’s former Eastlakes redevelopment, 6 kilometres from the CBD, had been in limbo for years following a bitter feud between Crown co-founders Iwan Sunito and Paul Sathio.

The relationship breakdown ultimately sent Crown Group into voluntary liquidation in August 2023, leaving creditors controlling a once-formidable portfolio with over $1 billion worth of projects.

Conquest founder Michael Akkawi told The Australian Financial Review the site’s valuation had deteriorated sharply due to its distressed state, creating a rare opportunity to secure a well-located urban infill site at a material discount.

“This is one of the largest land holdings in Sydney’s east, so we saw an incredible opportunity to revitalise a key urban precinct at a good price,” Akkawi said.

Conquest’s acquisition comes amid a broader shift in the lending environment that is shaking up the development sector. Major banks have adopted a far more conservative stance over the past 18 months as higher interest rates, volatile construction costs and regulatory pressures have increased project risk profiles.

Developers without strong balance sheets or pre-committed debt lines are finding it increasingly difficult to refinance, raise new capital or progress through construction milestones.

As a result, a growing pipeline of distressed development sites – many previously considered trophy assets – have been sold such as a newly built office in Melbourne’s Malvern previously owned by Landis Property. It was repossessed last year after the cost of its construction became unmanageable.

RF CorVal, a Sydney-based boutique real estate fund manager, bought the Malvern property late last year for just a touch over $18 million, which represents a 35 per cent discount to the original asking price.

Akkawi said he valued the Eastlakes site in excess of $100 million, which was why his company acquired it.

The lion’s share of the $75 million purchase price will go to the Commonwealth Bank, the senior secured lender, which is owed around $50 million. The remainder will go to Crown Group. BDO partners Andrew Sallway and Duncan Clubb are managing the asset disposals as appointed receivers.

Liquidators have spent almost two years trying to resolve the conflict between the Crown Group founders, with assets either carved up between the pair or sold off entirely.

The company has also split up its Green Square development, which sits above the suburb’s train station. Sathio has the rights to the residential apartments while Sunito took the rights for the retail and hotel suites. Another unfinished Crown project, based in Brisbane’s West End, has also been sold off.

Crown’s Eastlakes project was once billed as a suburb-defining mixed-use precinct across two sites, combining luxury apartments with a high-end shopping centre.

Instead, the development has remained idle for more than five years. In October, Sunito acquired the smaller northern site’s retail strip for about $12.5 million. Conquest has now taken control of the larger southern parcel, which will anchor the broader regeneration effort.

Akkawi said Conquest intended to adopt most of the elements within Crown’s original design, including the use of six towers, but would seek to amend the existing development approval to expand the number of dwellings from 450 to about 800.

A Queensbridge-branded shopping precinct would form the podium of the mixed-use development.

The total project cost is expected to reach $400 million, with National Australia Bank providing a $280 million construction finance facility. Conquest is targeting a $1 billion end value upon completion.

The transaction was brokered by Savills’ Stuart Cox and Tim Grosmann.