Gurner Group founder and executive chairman Tim Gurner and Geelong Mayor Stretch Kontelj discuss plans for Cunningham Pier. Picture: Alison Wynd
The worst of the construction costs crisis impacting high-density apartment developments is in the rear-view mirror, says luxury property developer Tim Gurner.
Mr Gurner, who was in Geelong on Friday to announce a partnership with Costa Property Group to develop a luxury hotel and apartments on Cunningham Pier, said construction costs had stabilised for the industry.
“We had a very, very challenging 2020 to 2024, so four years of incredibly challenging times for us as a business,” Mr Gurner said.
RELATED: Grocery giants eye new town centre near train station
1000+ new homes: Suburbs where building it set to boom
Major waterfront site up for grabs in Geelong CBD
“We’ve signed about $3bn worth of building contracts this year and all are finally back on budgets, whereas for four years we were materially over budget on every single one. So it’s finally starting to settle.
“There’s obviously not as much work around, so trades are actually needing and wanting work again. We feel good about where it is now.”
Gurner Group’s major projects include a $3.75bn redevelopment of the Jam Factory site in Melbourne’s Chapel St and the $1.7bn Elysium Fields lifestyle precinct at Docklands.
And it appears Gurner’s $300m Brougham St development will be the next major project to launch in the CBD.
The Costa Property Group’s Shirley Costa, Geelong Mayor Stretch Kontelj and Gurner Group founder and executive chairman Tim Gurner on Cunningham Pier. Picture: Alison Wynd
The woolstore development, in partnership with Geelong’s Dean Montgomery, would be launched to market in the new year, with a yet to be named builder appointed, Mr Gurner revealed on Friday.
The 19-storey mixed-use precinct will feature a five-star hotel and luxury apartments.
While the Victorian market remained flat, projects with a point of difference were attracting buyers, he said.
“Victoria is flat compared to the rest of the country, there is no question about that,” Mr Gurner said.
“But we’ve had great success this year with anything with a real point of difference.
“So anything that’s run of the mill, normal is very challenging.
Gurner is leading a $300m mixed use precinct at a former Dennys Lascelles woolstore in Geelong’s CBD, with a five-star hotel, luxury private residences and a food and beverage precinct.
“For something like this (the Cunningham Pier development), I’d be very confident of launching in a terrible market or a great market either way.
“We’re very focused on firstly getting locations that have a real point of different, but then creating something that just can never be done again.”
Up Property managing director Marcus Jankie said building costs had stabilised, allowing developers to plan with confidence.
But bigger projects required an understanding of how the local market could absorb new stock over what period of time.
“We’ve definitely found that construction costs, which has hampered the industry for a while, has certainly stabilised,” Mr Jankie said.
“They don’t go down but at least they’re manageable and you can understand them. We’ve moved away from the big risk of costs escalating at unknown rates.”
Up Property managing director Marcus Jankie.
Up Property, which has been operating in Geelong for past 15 years and has almost $500m in assets in the region, recently won fast-tracked permits for developments in Geelong West and the CBD, and is preparing to launch the former in November.
But the 4000sq m Malop St project, which is for 250 apartments and a 90-key short stay could take several years to emerge.
“We’re not afraid of that level of investment. We know from being in Geelong it’s about being super-thoughtful about going for it and understanding what the market can absorb in what period of time.
“We would love to find community housing partners to potentially look at a portion of it and there will be a portion of it that will be built to sell because it’s a really great spot within the CBD that’s close to Eastern Beach and it’s opposite Westfield and on the cusp of where it starts to feel a lot more residential.
Up Property won fast-tracked approval for this major development in Geelong’s CBD. Source: ClarkeHopkinsClarke.
“It’s a really unique location and one where we think is great for kicking off high-density residential within the Geelong CBD.”
Gurner Group has three sites in Geelong, including Cunningham Pier, Brougham St and the Osborne House precinct in North Geelong.
But Geelong is about as far in regional Australia the developer would go.
“We wouldn’t go to many regional cities, but I don’t really see Geelong as a regional city as much,” Mr Gurner said.
“It’s got a much strong economy and population here – there’s obviously a lot of wealth around.
“There’s also a lot of Melburnians that are investing down here.
“We’ve got sites in Parramatta, obviously Sydney’s second city. I look at this as a second CBD to Melbourne.”
English (US) · 