Fridcorp pursues boutique living market

Fridcorp will develop this residential site in North Melbourne.

Cashed up with the support of Beijing Capital Land and Wingate, Fridcorp is aggressively expanding its development pipeline throughout Sydney and Melbourne.

The group has purchased a major development site in North Melbourne at 3 and 5-15 Shiel St, which holds development approval for 65 apartments in a scheme put together by architect Elenberg Fraser.

It is now in the process of submitting an application for a revised proposal with 120 one and two-bedroom apartments in a 12-storey building, in line with a new strategy to focus on smaller “boutique” apartments in Melbourne, and mid-sized blocks in Sydney.

“We’re aggressively looking to acquire new sites in Sydney; we just believe in the longevity of the market there,” Fridcorp found and developer Paul Fridman says.

“We’ve got it ranked as our priority over Melbourne, because we can still see strong sales results occurring every weekend.”

There was a stage where things were in a bit of a frenzy, and that’s died down now, but good quality products in good locations are still finding buyers.

However, the group expects to purchase another four or five projects in Melbourne before the end of the year, with plans to add $300 million to $400 million of projects to the current pipeline of 1800 apartments.

Fridcorp enjoys strong relationships with boutique financier Wingate, in addition to a partnership with Hong Kong listed developer Beijing Capital Land, which backs Fridcorp’s developments on a case-by-case basis.

There were a swag of deep-pocketed Asia-based investors looking for exposure to Australian residential projects, Fridman says, adding that the group continued to receive approaches for backing on new projects.

Paul Fridman, director of Fridcorp, says demand is still strong in Sydney.

Paul Fridman, director of Fridcorp, says demand is still strong in Sydney.

“There’s seems to be a desire for these groups to diversify their risk, and it also helps from our point of view, because there’s an opportunity to mitigate our risk,” Fridman says.

Fridcorp, which sold $100 million in apartments in two hours at its Eve development in Sydney’s Erksineville in 2014, acknowledges that demand has cooled from an 18-month high, but developments in the centre of well-connected areas with good ground level retail precincts and transport links are still generating strong sales results.

“I look at results like Toga at Macquarie Park, which sold out very quickly and at a good price, and that tells me not to buy into ideas of an oversupply in Sydney,” he says.

“There was a stage where things were in a bit of a frenzy, and that’s died down now, but good quality products in good locations are still finding buyers.”

We’re aggressively looking to acquire new sites in Sydney; we just believe in the longevity of the market there

The group is also expanding its Melbourne pipeline, but has trained its focus to smaller “boutique” developments aimed at the owner-occupier market, rather than investors.

Competition for development sites is stiff, but opportunities are opening up every week as other mid-sized developers decide to pull back from construction, in a bid to avoid taking on unnecessary development risk when bank lending is getting harder to find.

The group bought the site at Shiel St from developers Spec Property, who were originally going to develop the site themselves into 65 apartments, before having a change of heart.

This article originally appeared on www.theaustralian.com.au/property.