Mid-tier property player Pace Development Group is carving a niche in Melbourne's inner south, adding another Punt Road site to its projects in St Kilda and Windsor.
PDG's Shane Wilkinson said the group had bought the former Metcast Foundries building at 40-48 Punt Road, near St Kilda junction.
The purchase comes soon after another deal involving the group in which the headquarters of the Australian Institute of Management at 181 Fitzroy Street, St Kilda, changed hands in September for $17,150,000.
PDG's plans for the Metcast site are yet to be finalised, but it also owns the adjoining building. PDG intends to knock down the single-level buildings on both sites.
The Fruit Supplies at 60-64 Punt Road will be the first to go, with demolition in January and construction starting in mid-2015, Mr Wilkinson said.
In its place PDG will build a $25 million development, the Henry Windsor. The 53-unit complex will contain 39 one-bedroom and 14 two-bedroom apartments.
Along with the rest of Melbourne, the number of projects in St Kilda has ballooned in recent years. About 600 apartments across six projects were in development, said Charter Keck Cramer director Robert Papaleo.
Nearby South Yarra has more, with 800 in the pipeline.
There are a lot of developers dusting off plans they put away a year or two ago. There's a feeling of greater confidence around, Mr Papaleo said.
Mr Wilkinson said the group was focusing on St Kilda because it was undervalued at the moment. "It's going through a lull," he said.
PDG has advanced plans for a 22-unit, $11 million redevelopment of the George Cinema, which it intends to start building in 2016.
The group will also turn the former Tongue & Groove nightclub at 16 Grey Street into a $21 million, nine-storey complex with 41 apartments.