This article is from the Australian Property Journal archive
DEVELOPER Sunkin Property Group will this weekend launch its $600 million urban regeneration project on the 9.34-hectare former CSIRO site in Melbourne’s bayside, in the biggest launch of its type this year.
Sunkin is bullish about a residential market recovery in the coming months, hoping to capitalise on it calls the “perfect storm” of purchaser demand outweighing constricted supply in Australia’s middle-ring suburbs.
It is launching the first two buildings of the Highett Common project, which will ultimately have 1,000 new apartments townhouses. The first release is of 167 apartments across two buildings, aimed at both owner occupiers and investors, and Sunkin is targeting over $30 million in sales this year. Construction of the stage one ison track to commence in late 2023/early 2024.
Sunkin paid $90 million for site at 37 Graham Road and 32 Middleton Street in 2020, and obtained approval late in 2021.
Property advisory firm Urbis estimates an additional 10,000 residents will be house-hunting in the Highett area specifically over the next 15 years.
“This presents a significant opportunity to create a more balanced housing market in these areas through urban regeneration projects like Highett Common,” said Urbis director, Mark Dawson, said.
“Underutilised land parcels can inject medium-density, well-designed product that sensitively integrate and complement the area’s existing character, whilst providing a range of dwelling types, sizes, and price points for wide market appeal.
“Supply has been constrained by several developers delaying project delivery due to the surging cost of construction last year. This has adversely affected the viability of some projects launched and sold prior to the increase,” he added.
Sunkin’s general manager, Lloyd Collins, public transport infrastructure, amenity, education and retail are all well-established in the location, but development is constrained by planning controls and a lack of sizeable in-fill sites.
Charter Keck Cramer director, Richard Temlett, said developers who will be launching residential projects into middle-ring suburbs in the coming months will likely be selling into an upward property cycle, often in areas where buying power is greater than metropolitan averages.
More than 80% of households in the Bayside area currently spend below the 30% threshold on their mortgages and rent, suggesting a higher propensity to drive upward price growth in the area over time, he said.
“The middle-ring is particularly well equipped to handle an increased density in housing, due to established transport networks and higher standard of liveability compared to greenfield developments for example.”
Sunkin commenced the delivery of extensive parklands and more than $10 million of site infrastructure works at Highett Common a year ago.
Collins said Sunkin had already received a number of enquiries from existing residents who have grown up in the wider Bayside area and are looking to live near existing social networks.
“Buyers have also been attracted by the substantial native parklands which we are delivering as the setting for our new dwellings,” he added.
