Melbourne, 27 August 2013-The soft economic outlook is underpinning a shift in development sentiment towards smaller-scale apartment projects in Melbourne.
CBRE’s Paul Tzamalis said funding constraints, longer sale processes and lengthy development times on higher density projects across the city were prompting developers to look increasingly towards smaller residential developments, with an emphasis on Melbourne’s eastern suburbs.
He commented: “Highly sought after sites in suburbs such as Kew, Hawthorn, Camberwell, Surrey Hills, Balwyn and Mont Albert are attracting strong interest from developers looking to undertake smaller residential developments with faster build schedules.
“As it becomes more difficult to fund higher density projects, developers are looking towards smaller-scale apartment buildings, with Melbourne’s east popular largely due to the higher sale rates achieved per square metre.”
CBRE is soon to market a 1,009sqm property in Surrey Hills, which is tipped to grab the attention of developers. Located at 629 Canterbury Road, the property is currently zoned Business 2, and features plans by the acclaimed Neil Architecture for future residential development.
“The opportunity is underpinned by an existing planning permit for two commercial offices, 28 residential apartments and four townhouses,” Mr Tzamalis remarked.
“We expect the sale of this site to attract keen interest from a diverse pool of buyers, both local and offshore.”
The property, which is owned and occupied by MDG Advertising, currently houses a two-storey Victorian style building. Mr Tzamalis and fellow CBRE agent Alex Zent are marketing the property via a Public Expression of Interest campaign on behalf of the vendor.
Mr Zent said two other residential developments currently underway in Surrey Hills were further evidence of the area’s rising popularity among consumers.
Seventeen apartments are under construction at 160 Union Road nearby, while 23 apartments are being built at 619 Canterbury Road.
“The average house prices of circa $1 million in Surrey Hills mean a large percentage of younger buyers cannot afford the existing housing stock and are openly looking at suburban apartment developments, such as this, as an affordable option,” Mr Zent said.
“Another key buyer in the suburban market is retiree aged couples, who are looking for low maintenance living as they downsize the family home.”
Surrey Hills is situated 12km from the Melbourne CBD, within close proximity to the Union and Mailing roads retail strips, Box Hill Hospital, reputable private schools and public transport links.
The Expression of Interest campaign for 629 Canterbury Road commences August 21.
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