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A Review of Melbourne Apartment Projects: Those Marketed; Those Canned

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Written by Marc Pallisco   
Sunday, 13 March 2011 00:00

INCENTIVES offered to stimulate apartment construction during the economic downturn, such as record low interest rates, and first home owner grants, have resulted in some of the city’s biggest, boldest apartment-based projects being offered to the market.

But not all developers could get their projects out of the ground.

Domain took a look at some of the more ambitious redevelopment proposals launched, and canned, since its last Apartment Guide, in Spring 2010:

 


1.    Carlton & United Brewery Site

IT’s just like local developer Grocon to propose Melbourne’s next landmark – but it outdid itself late last year, unveiling not one, but two distinctive apartment projects at the same time.

Grocon, a family business until recently headquartered in the northern suburb of Preston, is responsible for the iconic Eureka tower, in Southbank, and the Rialto office building, on Collins Street.

Late last year, the developer unveiled plans to build an 89-level, 280 metre apartment complex, the DCM Building, on part of the disused Carlton & United Brewery site in Carlton.

DCM Building will include some 800 flats, which would make it much denser than the Eureka tower, which is about the same height, but includes 550 apartments.

DCM Building is one of at least five major buildings Grocon wants to build on the 1.6 hectare former brewery site, which it bought in October 2006 for $39 million, from the Royal Melbourne Institute of Technology.

Another tower it wants to develop on the site, The Portrait (artist impression, above), will soar 32 levels and include 530 units – about the same as Eureka, which is three times the height.

Valued at $350 million, The Portrait will be in direct line of sight to the Shrine of Remembrance, three kilometres away.

The Portrait would be identified by an image of indigenous leader William Barak, etched into the building’s 100 metre high facade. Barak was an elder of Melbourne’s Wurundjeri tribe and is recognised for helping bridge the gap between black and white cultures.

Grocon chief executive Daniel Grollo said “the Shrine is about honouring a great set of Australians who made a sacrifice to Australia and this [The Portrait] is also about honouring a great set of Australians who made a sacrifice for Australia.”

The director of the architecture firm that designed The Portrait, Howard Raggatt, of Ashton Raggatt McDougal, said he wanted the high rise to be paired with the Shrine of Remembrance as “bookends” for the city.

The Portrait has a street address of 551 Swanston Street. Greg Hocking Real Estate director Greg Hocking is marketing studio apartments from $295,000. Studio apartments are typically small flats without a bedroom, often configured like a standard hotel rooms.

Studios are a relatively new dwelling concept, which Melbourne investors are being presented with more often, this century.

Banks are typically reluctant to lend on studio apartments because of their sub 50 square metre size. Because of this, they have proved hard to sell in an economic downturn. Furthermore, studios are one of the first dwelling types renters “upgrade” from when the market turns in their favour, and the rent they are prepared to pay, buys more.

The Carlton & United Brewery site is the second major inner-city “block” Grocon has controlled in the last decade.

Grocon is responsible for rebuilding the city’s Queen Victoria Hospital site into a major shopping centre with offices, and apartment skyscrapers, including one controversial complex that peers over the State Library steps.

Grocon has also recently completed a public housing based project, in Elizabeth Street, Carlton, as well as the HM@S Beach apartments in Port Melbourne. It recently won a government contract to build a $350 million village around the Footscray train station.


2.    Eden, Abbotsford

EVEN an objection from a neighbouring council wasn’t enough to stop one of the eastern suburb’s most controversial apartment-based projects from proceeding.

THE Yarra City Council and Victorian Civil and Administrative Tribunal both cited history, as justification to approve a $250 million, multi-tower compound, on the riverfront suburb border of Abbotsford, Hawthorn, Kew and Richmond – opposite the Victoria Gardens Shopping Centre.

Yarra Mayor Jane Garrett said the Honeywell site (named so because of its last office tenant), with a street address of 677 – 679 Victoria Street, has been earmarked for strategic redevelopment since 1999.

VCAT agreed, last October, when it supported council’s decision to approve the dramatic riverside project, adding the site meets the requirements of the now redundant Melbourne @ 5 Million planning policy, which encouraged high density developments around public transport.

Council wants to direct major residential developments into disused industrial zones, and away from heritage streets.

The result in this case, is Eden (artist impression, above) – a residential village set atop a four level podium building.

Eden will be identified by an 11-storey, glass apartment complex - the tallest of three towers that will rise from the site.

It will also include two restaurants, a cafe, office suites, medical centre and convenience store. A new bike pathway will connect the development to the Yarra River and Capital City Trail, via Victoria Street.

St Kilda Road based developer Hamton started marketing the Abbotsford apartments late last year, with one bedroom flats starting at $320,000, and three bedroom apartments from $1.2 million.

Hamton joint managing director Paul Hameister said a display suite will open this month.

Construction of the 586-unit Abbotsford village is set to commence in the third quarter of this year.

Hamton, with joint venture partner Industry Superannuation Trust, acquired the prime-located development site in late 2008, and in the depths of the economic downturn.

It paid developer Becton $30 million for what were three low-rise office buildings.

The asset was one of several commercial assets offloaded by Becton, which had also purchased the site for its future residential redevelopment.

In 2009, Hamton tried unsuccessfully to have the precinct gazetted as Richmond.

It also sold one of the offices, at 675 Victoria Street, for $12 million. Eden will affect the balance of the Abbotsford site.

Eden was approved by VCAT despite more than 1400 objections, including one from the Stonnington City Council, which has arguably been more conservative regarding redevelopment of the riverside land it controls.


3.    Stonington Malvern

IT’s the business association Apprentice Australia boss Mark Bouris would prefer viewers don’t pay attention to.

In June 2008, the development arm of the Sydney-based company Ashington, of which financier Bouris was once a non-executive director, paid too much ($47 million) for a blue-ribbon Malvern development site.

The 1.5 hectare site was, until recently, part of Deakin University’s Toorak campus.

The university sold what was then a three hectare campus to local consortium Hamton and Industry Superannuation Property Trust for $30 million, in a controversial deal finalised just before Christmas 2006.

In 2007, the consortium subdivided and sold the historic and heritage listed Stonington mansion to art dealer Rod Menzies for about $18 million.

The balance of the site was later sold to Ashington with a development permit.

Control of the Stonington Malvern development site changed several times last year, before China-based developer Ever Bright bought it for $30 million last September.

An Ever Bright spokesman said construction of dwellings would finally commence in the next few months.

The site, with frontage to Glenferrie Road and Somers Avenue, will make way for a village with 31 apartments, 14 homes, 22 townhouses and 12 “townhomes” – many of which had already sold off-the-plan, when the site was controlled by Ashington.

The Stonington Malvern development ends a long-running dispute led by the Stonnington City Council, federal treasurer and then local MP for Higgins, Peter Costello, and heritage property activists, who wanted to see the historic Stonington mansion stay in public hands.

Deakin acquired Stonington in 1992, when it merged with Victoria College, as part of education reforms which resulted in a number of university and college amalgamations and property transfers.

The Kirner government handed the Stonington mansion to Victoria College for educational purposes in 1991.

Deakin faced criticism for offering the entire campus for sale (including the heritage component). It justified the sale saying its principal aim and responsibility was to nurture and support a range of high-quality research and teaching programs that benefit the community, and that, without the funds from a full campus sale, it had finite resources to achieve this.


4.    Cumnock House and Mt Ridley College, Parkville. Now known as Allure.

FOUR years after local developer Drapac paid the Anglican Church $9 million for its parkside Ridley College campus, in Parkville, a new residential redevelopment, Allure, is under construction.

The 5000 square metre campus was vacated by the theological college soon after it sold in 2007.

Drapac subsequently reaped almost $4 million from the sale of 123-year old historic mansion Cumnock House, which it restored into a six bedroom luxury home (pictured, above).

It subdivided the balance of the site, opposite Royal Park, into high end townhouse village, Allure, which were marketed throughout the economic downturn at around $1.5 million each.

The Allure townhouses are due for completion mid-year.


NOT GOING AHEAD or PAUSED:



1 Bay Street, Brighton

THE future of one of Melbourne’s most iconic homes could come down to timing – and in particular, whether a wealthy individual, or opportunistic developer, will buy one of the suburb’s most controversial development sites.

A grand waterfront palace is currently for sale at 1 Bay Street, Brighton.

Formerly owned and occupied by Olympian and Gold Coast mayor, Ron Clarke, the Spanish Mission style home was set to be demolished, and replaced with a high-end apartment project, controversially approved by the Victorian Civil and Administrative Tribunal.

However late last year, and after the developer couldn’t get that project out of the ground, the grand home was listed for sale – either as a prestige property, or apartment development site.

Agents are quoting $12 million for the 1920s home, which has six bedrooms, and sits at the centre of a massive 1933 square metre block.


Wrap Southbank

DESPITE being up to 90 per cent sold out, developer Baracon failed to start construction of a major Southbank apartment tower last year.

Instead, it listed its Wrap Southbank project (pictured, top) at 133 City Road for sale. But when it failed to find a buyer prepared to pay the $12 million it was seeking, Baracon retained the site, and is now reportedly reconfiguring the mix of apartments within the project.

Southbank is one area of Melbourne where high density apartment development has been rampant, under the stewardship of redundant Planning Minister Justin Madden.

Having sold its interest in some other projects, Baracon is again proceeding with plans to convert the 1344 square metre Southbank site into a 41-level skyscraper with about 285 apartments, that will still be branded Wrap Southbank.

Meanwhile, nearby, Central Equity is redeveloping Crown Casino’s former training college at 141 – 145 City Road, into a 43-level, 513 unit complex.

However, offshore based developer DEC has reportedly temporarily suspended development of its $85 million Verge complex, also on City Road.


3181 Prahran

IT was to have been one of metropolitan Melbourne’s greenest apartment redevelopments – an environmentally sustainable building, with its own hanging gardens draping over Commercial Road, near a Prahran Market entrance.

But the 3181 Prahran redevelopment, at the corner of Commercial Road and Grattan Street (image, right), has been deferred indefinitely and its building contracts cancelled.

The project was to have soared eight levels and include 45 flats, the cheapest of which – a one bedroom - was marketed at $425,000.