Flinders Bank, an $800 million residential apartment development in Melbourne’s CBD, has been given the green light after the inclusion of a small component of affordable housing.
Melbourne has experienced ongoing community unrest regarding the proximity of affordable housing to the inner-city. In response to this, changes have been made to existing legislation making it easier for parties to negotiate the inclusion of affordable housing in residential developments. Flinders Bank is the first to follow the recent legislative changes.
The new three-tower project, overlooking the Yarra River, will present as many as 700 residential units; of the final total, 20 have been allocated for affordable housing. While this forms only a small component of the overall build, the inclusion has been praised by many industry professionals.
"I see this as a game changer for the private sector across the country," Robert Pradolin, former Australand senior executive, told The Australian Financial Review.
The 20 allocated affordable units will be made available for people on low to medium incomes and will incur below 50% market rents for the life of the building. It is expected that to offset the lower rental income, the units will be sold at an under-valued price to achieve comparable overall returns for private investors.
Planning Minister Richard Wayne was responsible for granting the project’s approval, on which Mr Pradolin commented saying that Mr Wayne “sees the value in getting the private sector focused on affordable housing.”
The site for Flinders Bank was acquired two years ago by two Chinese developers; China Century Group and Exhibition and Travel Group for $97 million. It was sold with approval for the development of 1060 units, however in March this year, the developer altered the plans in favour of a more up-market outcome.
The number of residential units was reduced to around 700, giving each residence increased average space and rejuvenated luxury design. The Flinders Bank project will also encompass a 168-room St Regis Hotel set to open in 2022. Construction is expected to commence in early 2019.
