Lend Lease has shelved construction of its Dock 5 project at Victoria Harbour precinct at Melbourne Docklands until the second quarter of 2004. Originally, Lend Lease were to begin building at Docklands in July this year, but lack of buyers, rising construction costs and dramatic revaluations in the apartment markets across Australia have combined to force a re-think. More than 12 months ago, the listed developer launched Dock 5 as the centrepiece of its 30 hectare Victoria Harbour site. However, according to property sources, buyers shied away from luxury apartments because of hefty prices and continued delays in construction timing. It is believed only 47 apartments were sold in the first offering after an expensive and extensive 12 month marketing and advertising campaign. In May, Lend Lease were forced back to the drawing board to reassess their options. The result has been a number of significant changes, with Lend Lease “hiring in” high-rise expertise from other specialist unit development groups. Few would dispute Lend Lease’s Victoria Harbour precinct is the jewel in the crown of Melbourne Docklands, but the problem is finding sufficient buyers of apartments in a downsized market to justify construction.
At the end of September, Lend Lease launched to its private client list Bayview Apartments at Dock 5 claiming it as Melbourne’s best address. Prices for a 139 square metre apartments with “natural flow through design” start at $689,000 to just under $1 million. Earlier this year the developer privately launched Park Terraces, garden apartments facing several acres of parkland and the CBD. And, for those investors still ambitious enough to invest in inner city Docklands apartments Lend Lease are offering an “exclusive” rental guarantee of around 4%. For owner occupiers at Docklands, especially within the quality precincts such as Mirvac’s Yarra’s Edge and Lend Lease’s Victoria Harbour, the key lifestyle advantages of living by the water combined, with increased infrastructure, will ensure it is held as one of Melbourne’s most sought after addresses. However get rich quick property speculators banking on high returns and short term capital growth are now in for a bumpy ride, especially as yields fall to 4% and below. The project represents the largest apartment project ever undertaken in Victoria by a Queensland-based development company.
