Development pair keep things nice and close
URBAN Inc founders Tim Gurner and Danny Ciarma believe they have a formula for development success - well-located boutique apartments.
Their focus on small projects in hip inner-city locations appears to be paying off.
Within three years, Urban Inc has completed two buildings, started construction on another six and locked in a development pipeline of 1530 apartments on another 20 sites.
Under construction are 255 apartments and townhouses at: the Tivoli in West Melbourne; Skylofts 601 in the CBD; 15 townhouses at 1810 Malvern Road; Bellini in Fitzroy North; another 17 townhouses at 15 Showers Street in Preston; and the Alessi apartments, also in West Melbourne.
"Our philosophy is to focus on inner-urban, in-fill sites," Mr Ciarma said.
That has seen Urban Inc acquire developments sites from Footscray to Malvern. West Melbourne is a particular favourite. Three of the company's most recent projects are clustered there.
The suburb's proximity to the city, wide streets and working-class roots means there is plenty of potential capital upside for investors, Mr Gurner said.
The company has between one and three projects in the market at any one time.
"It's a big advantage," Mr Gurner said, "because we have so many sites, we can pick and choose what's working."
A development in Footscray is on hold because the market's too competitive.
Instead, the business is focused on finalising the 54-dwelling Alessi project and pushing ahead with its sites in the inner north.
Neither partner is new to developing apartments projects.
Both had extensive experience as part-owners of Pan Urban with well-known developer Morry Schwartz before striking out on their own.
"In all our developments, the majority of stock is between $300,000 and $600,000," Mr Gurner said.
"We've had a model that's obviously worked well because we've sold out of everything."
The threshhold for what buyers were willing to pay has dropped substantially in the past year, Mr Ciarma said.
The barrier used to be about $600,000 for a two-bedroom apartment; now it was closer to $535,000, he said.
Buyers were also much more knowledgeable about the market now than they were five years ago.
"They look at your website, they look at what you've delivered, they see if you've funded stuff, they see if you've completed it on time," Mr Gurner said.
Both Mr Gurner and Mr Ciarma nominate location, efficient design and price-sensitive dwellings as the key.
"It's about efficiency of product." Mr Gurner said.
"If we can't do an efficient floor plate, we won't buy the site."