Homepage
PR Newswire
10-04-2014, 11:31 PM
Melbourne's loss is Sydney's gain as Fridcorp goes west
Rebecca Thistleton
480 words
11 Apr 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Melbourne developer Fridcorp has expanded its Sydney development plans, buying $70 million worth of land in Erskineville.
Fridcorp founder and director Paul Fridman, a BRW young rich-lister who founded the company when he was 20, has confidence in Sydney apartments.
His company is in due diligence for two other Sydney sites in areas where the off-the-plan market is surging.
His enthusiasm for new Melbourne projects has cooled as apartment approvals continue at near-peak levels amid talk of a possible oversupply around the central business district.
Fridcorp's latest acquisitions will be packaged with an adjacent Erskineville site in Sydney's inner west bought in March last year for $17.5 million.
The land will yield about $350 million worth of apartments in a staged project, "Eve". The group will have about $500 million worth of apartments on their way this year.
"It's pretty hot at the moment – we started looking at Sydney two years ago and there wasn't anywhere near the same ferocity in competition for sites there is now," he said.
"It's renewed my energy in the business – I've found the Sydney market to be a lot more retail-focused with more owner-occupiers. It makes us work harder and I think Sydney is making us a better developer."
Two distinct schools of thought have emerged in the off-the-plan apartment market: the projects which offer hotel-style lobbies, big gyms and heated pools, and those that don't.
While amenities can draw more owner-occupiers, higher strata fees can be off-putting.
Fridcorp invests in outdoor spaces, but the group aimed to keeping prices and strata fees lower by leaving out a gym and pool.
"We've been deliberate with our price point, we're keeping it under $1 million," Mr Fridman said.
A third of apartments in Eve will be one-bedroom, priced from $500,000 to $550,000, and the rest will be two bedrooms priced around $750,000 to $850,000.
The price tags are in line with the Sydney market where the median unit price is $552,500, according to RP Data, compared to $448,000 in Melbourne.
"We'll still do some Melbourne projects when the right sites and opportunities come up, but nothing for the sake of it," he said.
"We focus on areas where there is limited supply, there are more and more towers 50-storeys high being approved in Melbourne – I don't know where people are coming from to buy them," he said.
Fridcorp's latest Melbourne project, the 16-level Avenue building in South Yarra, will be finished in a fortnight after launching in 2011.
Rebecca Thistleton
480 words
11 Apr 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Melbourne developer Fridcorp has expanded its Sydney development plans, buying $70 million worth of land in Erskineville.
Fridcorp founder and director Paul Fridman, a BRW young rich-lister who founded the company when he was 20, has confidence in Sydney apartments.
His company is in due diligence for two other Sydney sites in areas where the off-the-plan market is surging.
His enthusiasm for new Melbourne projects has cooled as apartment approvals continue at near-peak levels amid talk of a possible oversupply around the central business district.
Fridcorp's latest acquisitions will be packaged with an adjacent Erskineville site in Sydney's inner west bought in March last year for $17.5 million.
The land will yield about $350 million worth of apartments in a staged project, "Eve". The group will have about $500 million worth of apartments on their way this year.
"It's pretty hot at the moment – we started looking at Sydney two years ago and there wasn't anywhere near the same ferocity in competition for sites there is now," he said.
"It's renewed my energy in the business – I've found the Sydney market to be a lot more retail-focused with more owner-occupiers. It makes us work harder and I think Sydney is making us a better developer."
Two distinct schools of thought have emerged in the off-the-plan apartment market: the projects which offer hotel-style lobbies, big gyms and heated pools, and those that don't.
While amenities can draw more owner-occupiers, higher strata fees can be off-putting.
Fridcorp invests in outdoor spaces, but the group aimed to keeping prices and strata fees lower by leaving out a gym and pool.
"We've been deliberate with our price point, we're keeping it under $1 million," Mr Fridman said.
A third of apartments in Eve will be one-bedroom, priced from $500,000 to $550,000, and the rest will be two bedrooms priced around $750,000 to $850,000.
The price tags are in line with the Sydney market where the median unit price is $552,500, according to RP Data, compared to $448,000 in Melbourne.
"We'll still do some Melbourne projects when the right sites and opportunities come up, but nothing for the sake of it," he said.
"We focus on areas where there is limited supply, there are more and more towers 50-storeys high being approved in Melbourne – I don't know where people are coming from to buy them," he said.
Fridcorp's latest Melbourne project, the 16-level Avenue building in South Yarra, will be finished in a fortnight after launching in 2011.