OpenCorp enters Melbourne's apartment market with two projects
The recent news of local developer OpenCorp's acquisition of a Hawthorn East development site coincides with the firm's push into Melbourne's apartment sector, as evidenced by another upcoming project slated for Ivanhoe.
With a presence spanning three states and in excess of $500 million in development nationally, Urban.com.au recently spoke with OpenCorp Director Matthew Lewison regarding their their new direction into Melbourne's inner-city market after thus far only being active in Melbourne's peripheral suburbs.
While still seeking strong prospects for the suburban land market, in which OpenCorp is active with Umbra in Melbourne's northern suburb of Greenvale, the change of tact into apartment developments is one of acting when the time is right.
The changing demographics of our cities is increasing the proportion of multi-residential dwellings being purchased and constructed. We anticipate this trend to continue and certainly see ourselves as being a key player, long term, in the inner-urban form of our major cities.
Matthew Lewison
First cab off the rank was the recently purchased 757-763 Toorak Road which was secured via a competitive tender process for $6.5 million. The former VicRoads land holding is now in the hands of RotheLowman with a planning application set to be lodged this month. The quick turnaround time will continue with sales anticipated to commence on the high-end project during early 2017.
The 1,595sqm block holds a frontage of 39.65m and was offered for sale with a development concept for 52 apartments and two retail tenancies.
Matthew Lewison expects an end value of approximately $48m for the Hawthorn East project which will target owner-occupiers and sit aside a fellow upcoming RotheLowman-designed apartment project at 771 Toorak Road.
Keeping within Boroondara, OpenCorp have another project planned for Ivanhoe with initial concept plans expecting 55 apartments or thereabouts. Mid-2017 is the targeted launch for the project.
We recognised when the Boroondara Council changed their planning scheme there would be a limited supply coming into the market as a result, so we have been aggressively chasing opportunities in that area.
Matthew Lewison.
As for aspirations on a grander scale, OpenCorp do plan to establish a presence in Sydney during coming years, although "We have missed the market cycle in Sydney this time around." Diversifying into different markets is on OpenCorp's agenda with a geographical spread key to taking advantage of different market cycles.
OpenCorp future strategy will see the firm limit itself to Australia's major markets.
Investing in success
757-763 Toorak Road is expected to be made available to investors via OpenCorp's Open Access Fund. Essentially a crowd-funded Property Development Fund, the Open Access Fund allows anyone from first-time to elite investors to have a hand in property development.
OpenCorp's crowd-funded model is applied across a host of projects, with a Product Disclosure Statement (PDS) in the works for their Hawthorn East acquisition and expected to be ready by April 2016.
This method of development differs from the traditional developer model, allowing participants in the project to receive a share of profits from the development of the project.