A modern lifestyle development by the Yarra River

FROM its trendy restaurants to its art and culture centres, Melbourne has long presented itself as one of the most desirable places to live and work. Unsurprisingly, Australian developer Salta Properties is banking on the city’s appeal for the success of its latest project, The Park House, not to mention the latter’s location.

“Situated on the edge of the Yarra River, The Park House is indeed unique. In Melbourne, only a handful of sites are by the water. We knew that down the line, it was going to be one of the more sought-after locations in Melbourne,” Sam Tarascio, managing director of Salta Properties, tells City & Country.

The 45-year-old private developer has already made its mark on the Australian property market. It launched its last project, The Green Square, comprising A$250 million (RM75.16 million) worth of environmentally friendly apartments, now completed and fully taken up, in Melbourne in 2012.

The Park House is its next project. With an estimated gross development value (GDV) of A$335 million, the project is scheduled to be completed by July 2018.

Located about 3km from the city centre, The Park House comprises two 9-storey blocks (Residence A and Residence B) with a total of 539 deluxe apartments.

“It is sort of equivalent to places in New York, where investors seek investments near Central Park, or in London, where investors gravitate towards Hyde Park. In Melbourne, it is ideal to have a property that overlooks the Yarra River,” says Tarascio.

Located at 627 Victoria Street in Abbotsford, the mid to high-end development has built-ups of 50
sq m (538.1 sq ft) to 100 sq m and a total area of 36,000 sq m. The prices of the units range from A$399,000 to A$500,000 (one-bedroom and studio), A$585,000 to A$810,000 (two-bedroom) and A$969,000 to A$1.2 million (three-bedroom).

Half of Residence A was already sold by the time The Park House was launched in the middle of last month. Construction is set to commence in September.

“The Yarra River has a big influence on the project. It is unusual to have a site that is situated right on the banks of the river. The Park House is poised to face the river in the north and the surrounding parks in the south. We believe this will help the development maintain its value,” says Tarascio.

“The planning minister recently changed the rules for developments along the Yarra River, which is a
significant natural asset, especially for Melbournians. There has been a lot of pressure to limit developments along the river. There are new rules in place to prevent large projects such as The Park House from being
developed on the banks. The Park House will be one of the last projects to be built along the river.”

Tarascio explains that it is rare to find a site in Melbourne that offers proximity to the city centre and the trappings of modern life and yet is surrounded by lush greenery.

“It is about creating a lifestyle. In Melbourne, people want to cycle and yet have access to the city to go to work, shopping and so on. There are plenty of cafés and shops in the the area, especially along Victoria Street. There are also trams just outside the development to take residents to other nearby areas.”

Once completed, The Park House will also feature four retail spaces fronting Victoria Street as well as a café facing a pedestrian and bicycle bridge. The developer plans to enhance and allow access to the parkland and active transport links on the banks of the Yarra River.

Inspired design, opulent fittings

In terms of design, the two towers of The Park House present a wave-like façade to the river side and a more urban feel to the Victoria Street side. According to Tarascio, the design was inspired by the Yarra River and its undulating surroundings.

Designed by Australia-based SJB Architects, the towers feature curved podiums and sculptured balconies.

“We have designed the units for owner-occupiers,” says Tarascio, adding that downsizers, discerning first-time homebuyers and investors are also targeted.

“We know the location really well and we believe the apartments of The Park House match the exclusitivity of the location and market. The Park House is our best product yet because of its location and the improvements we have incorporated into it.”

The units come with built-ins, furnishings and kitchen appliances from Germany-based Gaggenau. The interior décor is being handled by Carr Design Group.

Both Residence A and Residence B come with designated facilities, including a member’s lounge, a golf simulation range, library, cinema room, children’s playroom, 20m pool, gym, sauna, meeting room, barbecue area, pergola and seating, and upper terrace with pool and sundeck. “We also have a bicycle workshop for cyclists in The Park House. Melbournians are avid cyclists,” quips Tarascio.

 A resilient market

Melbourne is considered one of Australia’s property hot spots, especially for foreign investors. Based on the country’s Foreign Investment Review Board (FIRB), total foreign investment in real estate between 2014 and 2015 amounted to A$97 billion (about RM287.8 billion) with the largest contribution coming from
China (A$24.3 billion). Malaysia was fourth largest with
A$3.4 billion. Rising foreign demand, especially Chinese, has sparked concerns about the locals being priced out of the market.

Nonetheless, Salta Properties is confident the Melbourne market will continue to be resilient. “In Melbourne, the underlying demand is still very strong, so much so that the government and the planning authorities [in the finance sector] are actually trying to reduce it. However, we believe every measure taken by these agencies is going to reduce the supply rather than the demand.”

To curb foreign demand, the Victoria government has introduced such measures as stamp duties and revised state taxes. Foreign buyers are also only permitted to buy new dwellings or off-the-plan properties with the FIRB’s approval.

Effective July, foreign investors buying residential property in Victoria will be taxed 7% of the purchase price (in addition to stamp duty), whether the property is acquired directly or indirectly through a company or a trust. The tax was introduced on July 1, 2015, at 3%. Several banks, such as Commonwealth Bank of Australia and National Bank of Australia, have also strengthened their lending policies and reduced their lending ratio.

“We believe that in the next 18 to 24 months, there will be a lot of upward pressure on the prices. Despite the hurdles, we believe if buyers are buying now, they will be buying in a market with diminishing supply without the demand being affected. Nothing has changed in Melbourne in terms of its desirability; it is still a safe environment to invest. And our prices are still competitive compared with those in, for example, the UK. In Melbourne, property investments are for holding long term. Typically, we advise our investors to hold on to their properties in Melbourne for about seven years to see significant capital gain and rental growth,” says Tarascio. He feels now is a good time to buy due to the possible reduced supply in the future.

The Malaysian market is very important to Salta, says Tarascio, noting that 50% of its overseas sales are from Malaysia.

According to Knight Frank’s Australian Residential Review (May 2016), the values of housing finance commitments in Victoria in the three months to February 2016 grew 26.2% from the previous year to A$18.2 billion. The report also says that in Melbourne, transactions in the year to March totalled 55,478 houses (up 18.7% from the previous year) and 41,228 apartments (up 5.3% year on year).

Future plans

As at June 1, Salta Properties owned roughly 300ha (741 acres) in such areas as Abbotsford, Preston and Docklands in Melbourne, Perth, Tasmania and Adelaide with an estimated remaining GDV of A$500 million.

“We are a diversified developer and also one of the largest private developers in Australia. We develop across multiple sectors, such as residential, industrial, office and retail, and we have about seven hotel projects. In terms of residential projects, we have about 4,500 apartments in the pipeline in various locations across Melbourne, to keep us busy for the next five years. Our developments range from middle-end and lifestyle products to luxury and high-end products, and we steer clear of products that are purely for investment purposes, such as student housing,” says Tarascio.

“Apart from the owner-occupier type of stocks we offer, we are also known for our luxury developments. Recently, we have become more heavily involved in hotel developments, although it is all in the early stages. We have one project under construction in Perth and another to be launched by September/October in Docklands, which is going to incorporate a five-star hotel below apartments. We also have more sites in Tasmania and Melbourne [for these projects]. All these projects are targeted to be completed in the next five years,” says Tarascio. Other details of the hotel projects have yet to be finalised, he adds.

Salta Properties plans to acquire more land in the future. “We are interested in acquiring more sites in Melbourne’s CBD; we are also looking at more commercial and hotels sites. Typically, we acquire land well in advance on the market, and we look at the target development. When we buy the land, it may not be ready for that target development, but if it has the right attributes, we hold on to it. We tend to buy very early, sit, be patient and develop when the time is right,” says Tarascio.

As for The Park House, he is confident it will be a success. “With the amenities and the exceptional location along the river, we just want to create an environment in which people would love to live.”

This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on June 6, 2016. Subscribe here for your personal copy.