Construction to convert Fremantle’s iconic old Dalgety Woolstores, otherwise known as ‘Fort Knox’, into spacious one and two-bedroom warehouse apartments, will commence as early as this week.

The $130 million development, renamed ‘Heirloom’, has exceeded rigorous sales targets with 70% of pre-sales achieved to enable commencement.

Boutique developer Match and joint-venture partner Sirona Capital are developing the 90-year old historic landmark that stretches along Queen Victoria Street in Fremantle’s east end. The project is considered the largest residential heritage renewal of its kind in WA.

Match Managing Direction, Lloyd Clark, believes while heritage renewals are complex, they are important, and the inherent value is immeasurable.

“Heirloom is unquestionably a significant project to Fremantle, both from a social and economic perspective. It is the City’s gateway and located on its important Port. Historically, it represents the grass roots of the City and where it all started. It would have been a tragedy to leave such a magnificent building dormant to deteriorate into a state of disrepair,” he said.

“Heritage renewals are often considered by banks to carry more financial risk and, as such, the banks are more cautious in lending and require higher pre-sales. We have worked tirelessly to meet the requirements of this project with full support from the City of Fremantle who recognise how much this project will bring to the local economy.”

Heirloom will introduce around 250 new residents to Fremantle in 183 apartments featuring impressive high ceilings, century old wooden beams and outlooks over the Fremantle Port, Queen Victoria Street and magnificent light-filled internal streetscapes. The development will create a café/bar activity centre to bring life into this area of Fremantle. The on-flow impact of this will benefit local business and add to the rates base of the City.

Sirona Capital managing director Matthew McNeilly said the partnership with Match to develop Heirloom was consistent with Sirona’s broader vision for its investment in Fremantle.

“There’s no doubt that Fremantle is poised for an exciting future and the start of construction at Heirloom is another milestone that’s worth celebrating,” Mr McNeilly said.

“Fremantle’s future as a residential and tourism destination is very positive.

The City of Fremantle has welcomed the news, which constitutes a key milestone in its strategy to achieve the broader revitalisation of Fremantle.

“In recent years, Fremantle Council has made some carefully designed planning changes in order to generate new life and growth in parts of the City that have remained stagnant for too long. That hard work has laid the foundation for a more socially and economically vibrant Fremantle by delivering a lift in the number of people who will live, work, shop and socialise in the heart of our city,” said acting Fremantle Mayor Josh Wilson.

“Since the adoption of our award-winning Economic Development Strategy in 2011 there has been a steady stream of new projects in Fremantle as part of an investment pipeline in excess of $1 billion, which includes a healthy mix of residential, commercial, and hospitality development.

“Heirloom is a project that is particularly close to our heart because it shows how sensitively restoring heritage buildings for modern use can have significant commercial and community benefits.

“We congratulate Match and Sirona for bringing this project to life and we welcome the Heirloom development as an early installment in a fantastic new wave of projects that are already built, under construction, or approved for construction in Freo,” Mr Wilson said.

Construction of Heirloom is being undertaken by national top tier construction company, Built; a company that has worked on some of the country’s most high profile heritage projects, including the Old Treasury Buildings (WA), QT Sydney (NSW), Queen Victoria Building refurbishment (NSW), Art Gallery of NSW (NSW), and the Melbourne GPO and H&M flagship store (Vic). Heirloom is Built’s fourth significant heritage renewal in WA, following on from Perth Mint, Trinity Arcade and the Old Treasury Buildings.

The Heirloom renewal is designed by project Architect, Dominic Snellgrove from Cameron Chisholm Nicol (CCN), who is a recognised Australian leader in integrated architectural and recipient of Australia’s most prestigious architectural award, the AIA Sir Zelman Cowen Award for Public Architecture.

Completion of Heirloom is expected in 2017.

Media contacts:
Sirona Capital
Matthew McNeilly – 9212 1200
Mike Groves – 0427 065 551

Match
Lloyd Clark – 9324 3855
Amanda Fay – 0408 807 870

About Match

Match Pty Ltd was established in 2001 and quickly emerged as specialist in developing projects that rejuvenate the urban landscape and enhance arterial streetscapes.

With a strong ethos for creating spaces people want to live and work in, the company is today recognised for a range of quality projects and developmental ingenuity.

While Match is best known for its work in heritage renewals and creating environmentally sustainable outcomes, it boasts an extensive portfolio of iconic commercial and residential environments.

This vertically integrated organisation works to a seamless development model that provides an integrated service package to clients.

Its success has been unprecedented, as the company remains committed to its core values of quality and sustainable design.

About Sirona Capital

Sirona Capital is an independent private equity firm that is focused on investing in the real estate, natural resources, and energy sectors. Possessing a unique combination of financing and industry expertise and access to long-dated local and global capital, we develop unique financing solutions for special situations investments.

Sirona Capital has established a substantial real estate platform, comprising three core business areas:

• Private Equity – sourcing large scale special situations opportunities for major pools of private equity capital;
• Credit Securitisation – providing higher yield credit finance for investment and development opportunities (securitised by a global investment bank); and
• Syndicated Investments – managing development and/or investment syndicates for pre-qualified, wholesale family office and high net worth investors.

Since inception in 2009, Sirona Capital has become one of Western Australia’s most active real estate investors. In the past 18 months alone, Sirona Capital has committed capital into real estate projects with an estimated end value in excess of A$900 million.

About Heirloom history

Heirloom was originally part of a group of wool stores that occupied the entire street block. It was developed after the Australian Government worked to build the Australian wool industry to one that required extensive stockpiling.

Initially designed in 1922 and built the following year, a northeast wing was added in 1927 along the full length of Beach and Queen Victoria Streets. In 1942 a single story extension was built along Beach Street.

In 1944, the three storey structure and extension were raised an entire level resulting in the signature saw tooth roof structure, and in 1952, one bay extension across the rear single storey building was added. However, the main structure and sunroof was added between 1950 and 1952.

Comments by Lloyd Clark, Managing Director of Match

How is the apartment market performing at the moment?

The market is in a state of divide; on one side there are a number of large-scale apartment projects, many of which are backed by first-time developers looking to maximise land availability and density opportunities.

People are correct in being concerned about value proposition of these projects.  Many of them will struggle to achieve the required pre sales and, therefore, will not go ahead.

Match sits on the other side of the fence.  We have stayed true to our grass roots and focused on unique and well-located sites for boutique projects.

Developments like ours will continue to attract strong buyer interest. Where large-scale projects are currently in limbo, we have commenced construction of a number of new apartment projects and in the process of releasing more.

Have sales slowed in the last 12 months? If so, what do you think this is caused by? I.e. resources industry downturn, lower consumer confidence, drop in population growth, investors dropping off, oversupply etc.

Quite the opposite!  Match has seen an increase in interest for its development investment funds from investors diversifying their investment from the resource/mining sector into ‘bricks and mortar”.

In fact, the last few funds have been substantially oversubscribed and, contrary to some reports that are skewed by the influx of large-scale projects, buyer interest remains strong from owner-occupiers as well as investors for boutique quality apartments projects in great location.

What kinds of apartments are most in demand? I.e. one, two-bed, communal facilities, inner-city, smaller complexes etc.

The boutique feel is paramount!  Apartment projects comprising of 30-40 apartments are attracting the most interest, and they need to be in great locations that provide an abundance of amenity at the doorstep – which is really what apartment living is all about.  Demand remains strong for both 1 and 2 bed apartments.

What kind of buyers are being attracted to buying apartments? I.e. investors, single professionals etc.

We’re seeing a good mix of owner-occupiers with young professional couples who don’t want to compromise their lifestyle by moving out to the large land estates in the ‘burbs’.  We’re also seeing increasing interest from switched on investors who recognise that the apartment market is following world trends in being an emerging growth sector and, therefore, providing long term growth and strong returns.

There were a record number of apartments under construction in the year to Sept 2014, according to the ABS, with many of these projects now being finalised. Is there an under/oversupply of apartments at the moment? Do you expect there to be an over/undersupply in the next few years as projects being advertised now come to fruition?

There will never be an oversupply as apartment development is largely restricted by the Australian banking sector.  Banks generally require 50-60% pre sales for a developer to fund a project. Therefore projects under construction are largely sold out and new projects in the market will only get out of the ground with sufficient pre sales.  If there’s no demand, the project simply won’t proceed.

Feel free to add any extra info.

In the current market conditions, buyers need to do their homework to make sure that an investment will remain unique enough to retain long-term value.  They should think long term and consider whether large-scale cookie-cutter apartment developments, where apartments that are hard to differentiate, are going to have good resale potential, particularly if more than one is on the market at the same time.

Buyers should also look into the developer’s credentials and make sure they have a strong track record – buying apartments ‘off-the-plan’ is only a risk when you are not 100% assured of a quality outcome.