The East Perth Redevelopment Authority’s plans to redevelop 40 hectares of riverfront property on the eastern gateway to the CBD have suffered a double blow, with no tenders received for the first stage and industry players criticising the redevelopment p
The East Perth Redevelopment Authority’s plans to redevelop 40 hectares of riverfront property on the eastern gateway to the CBD have suffered a double blow, with no tenders received for the first stage and industry players criticising the redevelopment proposal.
Announced by the State Government earlier this year and to be known as Riverside, the project is bordered by the Swan River on two sides, Perth CBD and the Causeway intersection, and is estimated to eventually be home to 5,000 new residents and 1,000 workers.
These plans may need to be revised after tender submissions closed on June 10 without any interest from industry for the first three ‘super’ lots, ranging between 2,023 square metres and 2,988sq m, and intended for development into 156 apartments in buildings between three and 12 storeys.
EPRA chief executive officer Tony Morgan said the lack of tender submissions was not unusual in a tender process.
“EPRA is confident that the lots will be sold in the next offering and has had similar situations in the highly successful New Northbridge project, where several of the key development sites did not sell at tender, however sales were concluded shortly afterwards,” he said.
Developer feedback on the first land release at Riverside had been extremely positive, according to Mr Morgan, with both local and east coast developers interested in participating in the project at some stage in its sales program.
Mr Morgan said the lots would be released back on to the market in the coming months.
However, development industry players were far from positive about the Riverside project, with several telling WA Business News they were not interested in acquiring development sites in the project because of development concerns.
Listed developer Australand WA general manager, Chris Lewis, said there were several reasons his company did not tender for the project.
“It goes beyond just construction costs, and an issue of major concern to us was in relation to timing of supply of sites in Riverside and a potential oversupply that might happen at a later stage,” Mr Lewis said.
And the Government’s inclusion of a compulsory affordable housing component in exchange for density in the development approval process was a flawed proposal, he said.
“Yes, we have a social responsibility to deliver affordable housing, but we are talking about prestige real estate here,” Mr Lewis told WA Business News.
“Suggesting that an R160 zoning is a bonus for including a component of affordability is questionable, as good urban planning would dictate that those sites need that zoning anyway.
“EPRA has also been extremely prescriptive in terms of the outcomes they want for sites in terms of form, design and sustainability initiatives – all of which add to the cost of development.”
Ultimately, sites of the nature being offered were rare, but concerns over development had led to hesitancy on developers’ behalf, Mr Lewis said.
Burgess Rawson head of residential marketing Paul Durkin said that, despite the big demand for develop-ment sites, developers were more cautious in the projects they took on.
“Apartment developments are a risky business, and the bigger the project the bigger the risk is, especially given the times we are going into with the cost of labour and materials increasing all the time,” Mr Durkin said.
He said project marketers were also cautious with regard to the projects they were willing to take on, ensuring they would actually get out of the ground before selling them to the public.
