Malaysian developer SP Setia is set to launch its second project in Melbourne and take a foothold in the premium end of the residential market.
The international developer has outlined plans to build an upmarket complex for 557 St Kilda Road next to Wesley College, a site it bought from multi-millionaire businessman Lloyd Williams' Hudson Conway.
The 19-storey structure, designed by Karl Fender, will be the first apartment tower built on the renowned boulevard since Ubertas Group built a residential and hotel project almost opposite at number 572 in 2008.
Setia chief executive Choong Kai Wai said the company had begun building the first 28-storey tower of its Fulton Lane Project next to the Queen Victoria Market.
More than 80 per cent of the second 45-storey tower had been sold and Setia was now prepared to start another development, he said.
"This is a different market altogether," he said. "In fact, there is no competition there."
The 332-apartment project, called Parque Apartments, will be launched into a prestige market that is showing signs of life after several years of downturn.
Home auctions are surging and prices stabilising despite concerns about oversupply in Melbourne's apartment market.
The front of the streamlined glass tower facing St Kilda Road will rise 11 levels before dipping in the middle to eight storeys and rising towards the rear height of 19 levels.
The structure was dictated by site guidelines for Melbourne's Shrine of Remembrance that limit heights in the area, but the architects have taken advantage of the restriction, placing an open-air, 25-metre rooftop pool and lounge on the lowest section of the building.
The corner site includes dozens of heritage-listed elm trees on 5600 square metres of land that could not be built on, which will be turned into a private garden designed for residents by Paul Bangay, Mr Choong said.
Setia has interests in Singapore, Vietnam and the United Kingdom, as well as Malaysia.
It recently launched an $8 billion redevelopment of the Battersea Power Station in London, beating off billionaire Russian business tycoon Roman Abramovich for rights to the project.
Mr Choong said construction costs in Melbourne were high compared with other markets.
Setia would be looking at greenfield residential developments next, he said.
"We are looking at the fringe. Anywhere that is near a shopping centre, a good uni, train station or has strong demographic growth, we will be there," he said.
The 557 St Kilda Road development includes one, two and three-bedroom apartments starting at $410,313 with the two penthouses expected to fetch $3.1 million, CBRE's Andrew Leoncelli said.
Mr Leoncelli said contracts had been issued for 100 apartments. Construction is expected to start early next year and finish in 2016.