Doma fails to secure finance for The Foothills in Campbell, leaving off-the-plan property buyers in limbo

On Monday, Doma contacted buyers of the first three stages of the development to inform them of delays it said would impact the completion of the project.

The developer is now "reassessing delivery options" for The Foothills, located on a former CSIRO site at the base of Mount Ainslie.

In a statement, Doma managing director Jure Domazet said the group was unable to secure finance for the project.

"The first stage of The Foothills was released to the market at the start of 2020," he said.

"Over the following two and a half years whilst development, environmental and heritage approval processes were undertaken, building costs (including the price of raw materials), have risen by nearly 25 per cent.

"Cost escalation in off-the-plan developments is generally allowed for by developers but the delays, coupled with unusually high escalation that the whole industry has experienced in the last two years, has made management of this risk impossible for components of this development.

"The delays and cost escalation have meant that finance is unable to be secured for the development as it currently stands."

Mr Domazet said there was a "strong possibility" there would be no further construction activity on the site before the end of 2023, which would push the potential completion date to late-2025.

"These expected delays will also render the current sunset clauses within the existing sale contracts unacceptable to the project financier and will need to be extended," he said.

A sunset clause is a common term in off-the-plan contracts that allows buyers or developers to exit a contract if certain milestones are not met by a specified date.

Doma would not confirm whether it had attempted to cancel buyers' contracts.

Instead it told The Canberra Times buyers had been "advised to contact their sales agent in the first instance should they require any further information and to discuss their individual situation".

Earlier this year, the ACT government amended legislation to protect buyers in off-the-plan contracts.

Under the new laws, developers must receive a buyer's consent or seek a Supreme Court order to cancel a contract under a sunset and development delay clause.

Doma will now complete infrastructure works on the site, then work will pause while the situation is assessed.

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"Doma are now reassessing delivery options for The Foothills and will provide a further update to buyers by the end of the first quarter of 2023," Mr Domazet said.

The Foothills project attracted criticism and concerns from First Nations groups in the early stages of its development.

In 2021, Nyamudy-Ngambri elder Shane Mortimer called for further assessment of the four-hectare site, which he said contained rock carvings known as "petroglyphs" and other culturally significant items.

Assessment by cultural heritage advisers found Indigenous items on the land did not meet thresholds for Commonwealth or national heritage listings.

In December 2021, the area was bulldozed as work on the development began.

Last month, Doma submitted a works approval with the National Capital Authority for the final stage of the development.

Doma purchased the land, blocks 4 and 5, section 38 Campbell, in 2016 for $20 million.

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