Development Picks Up The Pace In AbbotsfordThe Age, Simon Johanson - Published June 2015
Another slice of industrial Abbotsford will be converted to inner-city apartments following Pace Development Group's purchase of a former Johnston Street warehouse.
The mid-tier developer, best known for its projects south of the Yarra River, is set to submit plans for a 180-unit project at 247-259 Johnston Street in Abbotsford.
Pace paid $13 million in April for the historic St Crispin House, which over time has been variously used by a shoe leather supplier, machine tool firm and other businesses.
The site was sold by agents Lemon Baxter and CBRE.
The red brick St Crispin building, just east of Victoria Park railway station, sits at the centre of a large block, which includes adjoining structures on either side and stretches back to Stafford Street.
The once industrially-focused Johnston Street is undergoing major rejuvenation.
Nearby, Martin Strode's SMA Projects has submitted plans for a 10-storey building at 239-249 Johnston Street that includes room for a ground-floor supermarket and liquor outlet with 158 apartments above.
Further along towards the city, another developer last week bid $5.5 million for a block at 140-142 Johnston Street on the corner with 1-3 Chapel Street in Fitzroy.
Teska Carson's Michael Taylor said that property attracted 80 pre-auction inquiries and six bidders before being knocked down for $6500 a square metre for the 850-square-metre site.
Pace founder, director and former BRW Young Rich Lister Shane Wilkinson said the group's $100 million-plus Abbotsford development follows its first foray north of the Yarra River in which it snapped up the former Smith Family headquarters in Collingwood.
Plans for the Smith Family site will go before Victoria's planning tribunal after the City of Yarra failed to make a decision on the group's proposed 12-storey, 101-unit development.
Pace has since submitted revised plans for 87 apartments, he said.
Mr Wilkinson said a significant rise in land prices as a result of heated competition between offshore and local developers was restricting development opportunities.
"The biggest issue confronting me every day is trying to find the right block of land. Given the purchase price of land, you've got to throw most feasibilities in the bin," he said.
Competition was also changing bank lending habits, he said.
Most were now lending to developers on a 15 per cent return on a project rather than the 20 per cent they required three years, a result of a more competitive market, Mr Wilkinson said.
Pace has two projects underway in Mentone, one in Windsor and the striking Lego-like 17-level Icon building at the St Kilda Junction.
Last month it launched the high-end 181 Fitzroy Street complex in St Kilda opposite Albert Park Lake, where at least half of the 160 apartments pre-sold before the official listing.