May 7th, 2014Little Projects is a name to reckoned with in Melbourne’s apartment revolution. Managing director Michael Fox attributes much of the company’s success to “giving people what they want”.It seems that we entices buyers away from the suburbs are apartments in premium, city-fringe locations, a high standard of design and fit-out, prices “a bit below the market”, and a wide varity of stylish communal facilities.
It was a formula Little Projects applied in its construction of ILK in South Yarra’s Forrest Hill precinct. The building sold out before completion to a mix of about half investors and half owner-occupiers.
The 24-storey building of 388 apartments is notable for the quantity and style of its communal facilities. On level three, there is a gym, 24-meter pool, sauna and steam room. On level nine, residents can entertain 14 guests to sit-down dinner, host a cocktail party, a barbecue or a night at the movies or just catch up with friends from the building. Facilities on this floor include a fully equipped marble kitchen, a dining and lounge area with an open fireplace, glamorous furniture and stunning views, a cinema that opens to a relaxed barbecue area and several terraces.
The entry-level price for an apartment in ILK was about $350,000. “For that money, you could get a house on the edge of the suburbs or an apartment in South Yarra with suburb facilities”, say Fox.
People are time poor, he says, and living in a house in an outlying suburb has a lot of associated time costs. “You can spend 15 hours a week travelling to and from work and five hours on the weekend maintaining your home, or you can buy an apartment close to work and not have to worry about maintenance,” he says.
“There’s a queue to live in ILK now. Word got out that it’s a great place to live. People are proud to live there. You see them showing their friends around the building.”
This level of style and amenity is being included in other Little Projects buildings.
Central, also in South Yarra and due for completion in August next year, will have 600 square meters of residents’ facilities on the penthouse floor. Level 30 will have a pool and gym, kitchen, dining room and lounge, barbecue areas and two sky terraces. All apartments but have one have sold.
Most of eth residents in Little Projects buildings tend to be singles – with a lot of young women attracted by the security of high-rise living – and young professional couples. But there are about 15 families in ILK and downsizers in the larger apartments.
Downsizers are attracted to luxury and location, Fox says, and want apartments that are similar in size to the house they have left. The 17 penthouses in ILK sold to people leaving the family home for the convenience and pleasure of a secure, lock-an-leave lifestyle with shopping, restaurants, entertainment and facilities on the doorstep.
“We did a small development in wattle Road in Hawthorn – 48 apartments at 150 square meters for around $1.5 million each. Forty-five of those sold to downsizers.” says Fox.
Each new Little Projects developments is an evolution, raising the bar on what has gone before. “We work on understanding what our customers want and then developing the best possible products for them.”
The company is based on a strategy of buying key sites flanked by excellent amenities and public transport in areas where people genuinely want to live.
“Also, the market has been good to us,” Fox says.
“Timing was good with first home owner’s grant and then self-managed super funds became big buyers. We also had a very big push from government to stop the urban sprawl and consolidate into prime, city-fringe areas. The apartment market was up and away. I think it was last year Melbourne reached 100,000 apartments, but it’s taken the best part of 15 years to get there. The next 100,000 will come a lot quicker.
“We’re still not producing enough apartments in Melbourne. Demand is something like 45,000 a year and we’re producing 40,000. The desire for investment property in Melbourne’s inner city is phenomenal. This is a very exciting time in the development space.”