Michael Fox’s new boutique development venture is “gathering momentum” after quietly buying five development sites for more than $60 million.
In the process CostaFox, a joint venture between the former Little Projects executive and Geelong-based Costa Asset Management, has amassed a $600 million development pipeline in the year-and-a-half since it was founded.
Apart from its first high-profile development of a Manly apartment block in Sydney’s Bower Street, Mr Fox has operated under the radar since ending a two-decade association with rich lister Paul Little that spanned Toll Holdings and the development company Little Projects.
CostaFox’s six luxury apartments in Manly set a record $33,500 square-metre price for the area after one with sweeping ocean views sold for $9.5 million last year.
The apartment block was now under construction.
Larger owner-occupier apartments in prime locations were now coming into their own, Mr Fox said.
Early in 2016, the group purchased a distressed asset, a potential development site at 180 Bay Street in Port Melbourne, for $10.5 million which if flipped two months ago for $14.5 million, earning a 40 per cent uplift after holding it for a year and half.
It has now focused on two industrial developments, an echo of Mr Fox’s past developing commercial sites for Smorgon and Toll Holdings.
That focus was the result of wariness about the effect of government, banking and tax measures to cool ‘s overheated apartment sector.
“We’ve had a big boom in apartments. That’s now coming off,” he said. As well, industrial values were “climbing reasonably quickly”.
The group has sought planning approval for 177 smaller warehouses, offices, a childcare centre, shops and cafe at its $100 million Indwe??? Street development in West Footscray.
It purchased the site, opposite a residential street, for $10.3 million, employing architects Rothelowman to design industrial units that “look like townhouses”.
The project was not without controversy.
“It was only recently rezoned to future employment land but residents want it changed to residential zoning – which would suit us – but I don’t think the Council or department of planning support that,” he said.
Plans were underway for another 9.7-hectare site in Cooper Street, Epping which it snapped up for $9.5 million.
The group has also swooped on a corner block at 111 Lorimer Street in Fisherman’s Bend, a location immediately behind Mirvac’s low-rise Yarra’s Edge development.
Under planning guidelines the site will take a 40-level tower. The group paid less than the $20 million asking price for the 4108-square-metre block.
CostaFox plans to put 400 apartments and 3000 square metres of commercial space on the site when the market is ready.
“We are gathering momentum,” Mr Fox says.