Perth-based developer Psaros has increased its pipeline of work to around 700 apartments over the next three years, acquiring three development sites where it is planning $125 million worth of new projects.
The largest site is in Scarborough, on the corner of Hastings Street and Brighton Road, where Psaros is planning a $75 million, 102-apartment project.
Closer to the city, on Selby Street in Churchlands, Psaros is planning to build 97 apartments near the intersection of Herdsman Parade, with that project valued at around $50 million.
And on Beaufort Street, Psaros has bought the former Mike Hopkins Office Furniture site and is planning to build 42 apartments with an end project value of around $25 million.
The Beaufort Street site will also comprise a commercial or retail tenancy on the ground floor.
The sale of the site was brokered by commercial real estate agency Burgess Rawson.
Psaros chief executive Danny Psaros told Business News the company was considering its options for the retail component of the site, including possibly expanding its hospitality operations following the success of its East Perth eatery, Brika.
Mr Psaros said the group would soon commence construction on another two projects, a 40-apartment development on Brewer Street in East Perth and a 36-apartment project on Northwood Street in West Leederville.
He said the addition of the recent acquisitions to the Psaros project pipeline would result in the company developing four to six projects every year for the next three years, delivering between 150 and 250 apartments each year.
“At present there is a lot of comment about a potential oversupply of new apartments across Perth,” Mr Psaros said.
“The fact is though; we’re not building enough houses or apartments.”
He said the Perth market was undergoing a structural change with a massive increase in demand for apartment living.
“We’re seeing a huge shift, our analysis is showing that people are deserting the suburbs and coming into the city in a big way, it’s caught on fire,” Mr Psaros said.
“There are land developers out there saying housing is going great, but it’s actually dwindling because people have caught on to the problem of transportation, as well as the cost of petrol and the time it takes to get around.
“If you add all that up, it shows apartment living is actually cheaper than living in the suburbs.”
He said apartment living had not only become popular with first home buyers, but also baby boomers looking to downsize for a more convenient lifestyle.
“We’re seeing a lot of mums and dads who had a lot of money in their super funds decimated by the GFC, and the value of their properties have dropped, so they’re saying ‘maybe a two bedroom apartment is OK, maybe I don’t need a three bedroom apartment, and maybe I don’t need a big house in the suburbs’,’’ Mr Psaros said.
“There’s definitely a big shift happening here, it’s almost like what we’re seeing here is what happened in Sydney and Melbourne, where apartment living was accepted 10 years ago.
“It’s happening here in Perth in a big way. It’s taken a couple of waves over 20 years to understand what apartment living is all about, but 95 per cent of the world lives that way so why are we any different?”
