KordaMentha is not a name usually associated with property development, but the insolvency specialists’ real estate arm has just completed an apartment project in Melbourne’s hip inner-city Northcote.
The $16 million, four-storey building, Libertine Apartments, has 34 one and two-bedroom apartments and is the third development entirely overseen by subsidiary KM Develop.
“We’ve always had an interest in development and dabbled in it in the past,” said real estate partner Steven Wong.
The firm bought the site at 115-125 Victoria Road off-market after it was passed in at auction.
KM had previously undertaken due diligence on the property and knew the site’s approved plans for 22 large, poorly designed apartments would enable it to redesign them to include 34 units with high-spec finishes and appliances.
Construction was completed earlier this year.
Mr Wong admits standalone development is an unusual approach for a firm specialising in restructuring failing businesses.
“We focus on our own projects on balance sheet. We will work with investors and other developers who don’t have the knowledge but we’re also looking at sites just like other developers out there,” he said.
“We acquired it, designed it, and got the planning permit. We did everything.”
The firm’s real estate arm grew out of property work KordaMentha did after the collapse of Ansett Airlines and similar real estate work, such as the Fincorp collapse, precipitated by the global financial crisis.
“As the banking work quieted down we were looking at ways to diversify our business. This was a natural fit for us,” he said. “It’s not our primary core business but it’s something we are interested in and committed to.”
Mr Wong said KordaMentha’s real estate arm accounted for about 20 per cent of revenue.
Libertine was, in part, a trophy project, “over specced” because “we wanted to create a project we were really proud of and that was true to the renders,” he said.
Its lobby wouldn’t be out of place in St Kilda Road, neither would the rooftop deck and internal light-well that penetrates the building.
A Carlton-based architect who grew up in Northcote designed the facade to reflect the surrounding streetscape of migrant Italian and Greek households.
Melbourne’s overheated development sector and the prices being paid for sites has since pushed the firm to focus on providing development services.
“After Libertine we made a decision to pull back a bit because the market was getting too hot,” Mr Wong said.
The property development and project delivery arm is working with developers who will deliver more than 2000 apartments in Melbourne.
They have also teamed up with Little Projects’ first Queensland venture in Broadbeach on the Gold Coast, he said.
Mr Wong said KM would still be targeting medium-density developments within 10 kilometres of Melbourne’s CBD and projects in Sydney and Brisbane.