Glamour couple's building company folds
Modco Residential, the building company established during the pandemic by prominent Perth couple Yusuf Khan and Cynthia Lu, has gone into administration.
Perth building company Modco Residential, founded just two years ago by glamour couple Yusuf Khan and his wife Cynthia Lu, has gone into voluntary administration.
The company website says it “was co-founded while on a journey to find a solution to the complexity and challenges faced in building residential homes such as navigating hidden costs, limiting build options, volatility and inconsistencies in experience and finishes.”
But the enterprise has fallen prey to those same complexities that have led to record numbers of builders folding.
In a statement issued Monday (24 July), company Director Damien Clancy said undue media attention had played a part in bringing the business down.
“Despite our efforts to overcome adversities expected in building a growing business, the rapid and unforeseen external challenges ranging from unprecedented industry challenges, perpetuated by a series of controversial articles that created distrust amongst stakeholders, became an insurmountable challenge,” Mr Clancy noted.
“What initially started as a nationwide industry challenge of increased costs of materials and labour and shortage of skilled trade forcing many builders into administration in the past financial year, was then exacerbated by the intense media scrutiny targeting Modco Residential, creating distrust amongst our trades, vendors, staff, shareholders, clients and the industry insurer QBE.”
“This caused significant strain on business operations and made it exceptionally challenging for us to acquire skilled tradespeople, retain staff and continue our operations.”
He added that he hoped the close of Modco would be a catalyst to highlight the need for systemic change and industry support to address the issues that persist within the construction sector.
State Government industry watchdog Building and Energy had raised concerns about the company’s financial security in May. It also said the company had been demanding progress payments before work had reached the necessary stage for such payments.
GTS Advisory has been appointed as administrator.
Ms Lu and Mr Khan’s lavish lifestyle was on display on their social media accounts, which showcased them posing with luxury cars and travelling in business class.
The company was established in 2020 amid the Covid pandemic with the promise of delivering homes within a guaranteed 20-week build time.
Nationally, building costs are still rising but at the slowest rate since 2021, but many struggling builders are still facing an uphill battle to survive.
Late last month, prominent Perth building company Parcel Property wound up its apartment development operations.