Nedlands aged care project in time crunch

Oryx Communities has pushed for another time extension for its four-storey Nedlands facility, citing the withdrawal of its builder PS Structures as the main reason.

The 80-bed Melvista Nedlands, to be built on the corner of Betty Street and Doonan Road, was initially approved in March 2021.

The proposed development was submitted to the state government's State Development Assessment Unit pathway, which was designed to expedite shovel-ready projects during COVID.

Oryx Communities requested a 24-month extension for substantial commencement in December 2022, citing significant delays because of the heated market.

The Western Australian Planning Commission instead granted a 12-month extension in December, noting that Oryx said lodgment of the building licence was imminent.

Despite the decision, the aged care provider applied to the State Administrative Tribunal for a review of the decision, reaffirming its request for a 24-month extension from December 2022.

Oryx instructed its project builder PS Structures to revise the plan, which updated the timing for a practical completion by late 2024.

However, PS Structures formally withdrew from the project in mid-February, with managing director Royle Godwin’s letter to Oryx saying they did so reluctantly.

“Over the Christmas break, we had the opportunity to closely evaluate the overall risk position of the entire business and decided to make some strategic choices with regards to our project profile for the next few years,” Mr Godwin said in the letter.

“In the current over heated market, aged care projects have proven to be more complex to manage and are a higher order of cost and time risk than other forms of construction, compared with the projects on our books and currently available to us for tendering.

“We have taken this conservative position for the sake of our business, which means avoiding more complicated projects in favour of more simple projects like education, industrial, distribution warehouses, etc.”

Oryx has since engaged EMCO Building to be its preferred builder for Melvista Nedlands.

The development had attracted significant community opposition with a City of Nedlands report in October saying the actions taken to date were inconsistent with the shovel-ready status Oryx claimed to be at.

Landowner Deuke Investments appointed Verum Group as its consultant for the Melvista Aged Care project.

Oryx Communities is the Deuke’s parent company and the project’s intended aged care operator.

A letter by Verum, on behalf of Oryx, said the 12-month extension would only give them time until December this year and only seven months for Emco to finalise trade letting contracts, mobilise the site, complete excavation and siteworks, and complete Stage 1 works to achieve substantial commencement.

“The extension to the approval was granted in December 2022 at a time when the construction industry is winding down and does not gear up until the end of January,” it said.

“Therefore, the extension was effectively less than 11 months.

“The client [Deuke Investments] and its consultant team have continued working swiftly with the selected builder, however, it will still require until at least early May 2024 to confirm market coverage, vet trades and lock in the agreed contract sum.”

Verum's letter also highlighted concerns for the future of aged care projects.

"We emphasise that the decision for PS Structures, a highly experienced builder, to withdraw from constructing aged care projects altogether due to the cost risks and complexity of building in this sector raises serious concerns with an aging population and lack of facilities to cater for them," it said.

"It is important to note that there is only a small field of builders who have the capability and willingness to undertake projects that involve the construction of an aged care facility in Perth.

"Aged care construction is a highly specialised area with complex technical, mechanical, electrical, and hydraulic requirements similar to a hospital."

The State Administrative Tribunal has directed the WAPC to reconsider its decision to grant a 12-month extension by August.