Everything old is new again for the Australian property market, where the beauty and benefits of restoring historic inner-city buildings into luxury residential abodes has become big business.
The trend, gathering momentum for the past five years across the country, has been embraced for its romance, preservation of history and conversion of valuable inner city space.
Architects such as Melbourne’s award-winning Rothelowman have worked on heritage restoration projects across the country, transforming Federation and Victorian mansions, 1920s factories and Art Deco shop fronts into contemporary apartments.
"When you looked at older-world cities, nearly everything was done using existing building fabric," Rothelowman Melbourne principal Stuart Marsland said.
"In Australia, there’s been a case of knock down and rebuild over the last 200 years, now it’s becoming more acceptable [to restore] a building in suburban locations, and it’s a sign of the country’s growing sophistication," Mr. Marsland said.
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It’s a sign, he said, of the country’s growing maturity and pride in its existing built form.
Redeveloped units in historic buildings drawing top prices
The Castle Residences, Shanghai United’s A$380 million (US$291.8 million) residential development on the fringe of Sydney’s central business district, has been this year’s most high-profile example.
The project includes the redevelopment of the heritage-listed 1876-built sandstone Porter House, which will form an integral part of the luxury 121-room boutique hotel and 131 apartments.
Interior view of an apartment atop the Castle Residences in Sydney
CBRE Residential ProjectsThe combination of historic and contemporary architecture with five-star amenities, bars, restaurants, a gym and 24-hour security has attracted a bevy of local and international buyers.
The three-level penthouse sold off-plan prior to its public release in August for A$18 million (US$13.8 million), with half of all apartments sold the morning they were released, according to the project’s sales agents, CBRE.
Priced from A$1.15 million (US$1.15 million) for a studio apartment, top sales included an upper floor three-bedroom apartment for A$5.8 million (US$4.45 million) and several two-bedroom units for between A$3.5 million (US$2.69 million) and A$4 million (US$3.07 million).
By comparison, the median price for existing two-bedroom and three-bedroom apartments in Sydney in October was A$1.135 million (US$870,000) and A$2.02 million (US$1.55 million) respectively, according to CoreLogic RP Data figures.
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Demand from local buyers, particularly downsizers, for the tightly held Hyde Park precinct remains strong according to agents.
"We found buyers were eager to secure themselves a piece of real estate in the highly sought-after Hyde Park precinct due to the unbeatable proximity to all Sydney CBD has to offer," CBRE Managing Director David Milton said.
Other buildings offering the combination of heritage, an enviable inner city position and unrivaled amenities have proven overwhelmingly popular with buyers.
Realm Adelaide, which will revive the 1858-built Assay House by restoring the facade and adding a bar and restaurant in the historic building, sold more than 70% of its 314 apartments within 10 months of being released in November 2016, which will be built above the historic house.
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Melbourne embracing historic buildings
Similarly, in Melbourne, transforming its many Victorian mansions has proved a winning formula, providing the ideal foundation for house-like proportions.
Well-heeled downsizers and city professionals snapped up Classic East Melbourne in 2016, spending between A$1.4 million (US$1.08 million) and A$6.5 million (US$4.99 million) for apartments, including seven that were part of the restored historic Mosspennoch House.
Two new buildings were designed and built to complement the historic mansion, while heritage architects Lovell Chen restored Mosspennoch with mansion-style apartments retaining original features such as the hall and elements of the ballroom.
The New Charsfield, by architects Rothelowman, is a residential tower of 150 luxury residential apartments built behind St. Kilda Road’s oldest mansion, three kilometers from Melbourne’s central business district. It sold 85% of its stock before construction began when it was released in 2015.
Exterior rendering of the New Charsfield in Melbourne
RothelowmanMr. Marsland said they were careful to preserve the composition and well-composed Italianate form of the 1886-built mansion, which had a long history within the distinguished residential area.
"Maintaining the lasting effect of this project has been integral to the design process, as this will be complementing the oldest surviving structure in St. Kilda Road," he said.
Demand for ‘reused’ buildings
Mr. Marsland said market pressure was driving the demand for inner city sites to be reused, but there was also a desire, and need, to retain such architecture, resulting in exciting design outcomes combining the old—high-vaulted ceilings, beautiful brickwork and embellished entrances—with new features added, such as luxury kitchen appliances, home automation and high-end materials.
Developers need to apply for special permits and have heritage architects involved to convert the properties.
These permits are usually approved as developers often salvage more than they are mandated to and go above and beyond what they're required to retain by planning laws.
"It is an exciting opportunity when you’re working with an existing building because it forces you to make decisions that might not be the ones you would have made if faced with a blank piece of paper," Mr. Marsland said.
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The result is no two apartment buildings are the same, another draw for discerning buyers who’ve recognized the value in contemporary features, world class amenities and exciting architectural features.
Rothelowman Brisbane principal Jeff Brown said a strong sense of place had resulted from the conversion of a former 1920s railway workshop to create Austin in West End, a two kilometer walk from Brisbane’s central business district.
Artwork has been incorporated into both the exterior podium, the main lobby and the elevator lobbies at the upper residential levels. The rooftop common area’s amenities are landscaped to encourage both private and social interaction.
The old industrial building, with its beautiful brickwork and high vaulted ceilings, did not have to be kept, but was retained because of its "sense of place" and connection with the area.
"There’s a romance that goes with retaining a historic building," Mr. Brown said.
"People are attached with where they live and hang out, they are innately romantic with history by positioning themselves in that and retaining that within urban design and architecture," he continued.
"It becomes so much more powerful. That’s why these projects sell really well."