With property groups increasingly understanding the potential of heritage assets, Business News explores some of the state’s prominent heritage redevelopments and those in the pipeline.
A crumbling and abandoned building well past its use-by date doesn’t exactly present as a dream opportunity for many developers.
But for some property groups, these heritage-listed assets have quickly become the jewel in the crown of their development portfolios, and an increasingly sought-after opportunity.
Apartment developer Match (part of integrated property group MGroup) has made a name for itself in heritage restoration, actively eyeing properties others would prefer not to touch.
“There was a period in Perth where development and redevelopment were so fast paced that many valuable heritage properties were left so decrepit they would ultimately be sanctioned for demolition,” MGroup managing director Lloyd Clark told Business News.
“Developers were hesitant to touch historic fabric due to the risks and unforeseen costs compared to the low-cost, high-profit cookie-cutter buildings that were materialising across the city.
“It was new territory for most developers and, as a young company on a mission to disrupt the status quo ... we were able to demonstrate both demand and return on investment.”
Mr Clark said it was this lack of overall industry interest that made it relatively easy for Match to acquire sites ripe for heritage rejuvenation in the early 2000s, with the $130 million redevelopment of Fremantle’s Dalgety Woolstores its largest to date.
The Woolstores were vacant for 20 years until Match leveraged the existing structure in 2012 to create 183 one- and two-bedroom warehouse-style apartments, retaining more than 85 per cent of the original heritage fabric.
The project, named Heirloom, received a number of awards, but also proved popular, with more than 70 per cent of apartments sold before construction started.
“Our success was supported by global shifts towards apartment living and a number of high-profile warehouse renewals around the world,” Mr Clark said.
“Buyers were starting to view apartments as a lifestyle choice and developers needed to meet this market with unique and appealing propositions.”
The Wool Stores in Fremantle were vacant for 20 years before Match's apartment redevelopment. Photos: Match
Heirloom followed several other heritage-led projects for Match, including: the rejuvenation of the Clocktower on Beaufort Street (built in 1936) into 28 apartments and retail space; the restoration of a 1920s Maylands building, now the 42-apartment and commercial precinct Maymont; and Home, on the corner of Milligan and Murray streets in the CBD, which involved converting the 1927 WD & HO Wills former tobacco building into 30 warehouse apartments, 37 adjoining terrace apartments and commercial space.
“We find that people are really excited about owning an apartment that has heritage features that cannot be duplicated,” Mr Clark said.
“Well-executed heritage renewals elicit an emotional response and sense of connection that is so important in property sales.”
Drawcard
That power of nostalgic connection has also translated to the hospitality space, where one of Western Australia’s most celebrated heritage restorations, The State Buildings – which houses luxury hotel, COMO The Treasury, as well as restaurants Wildflower, Post, and Petition Kitchen – has received international acclaim.
COMO The Treasury was named best city hotel in Australia and New Zealand by New York-based tourism magazine Travel + Leisure earlier this year, and has previously been voted number one best hotel in Australia (and number two in the world) by global media publishing group Condé Nast.
Similarly, Wildflower was named best restaurant at the 2019 Australian Hotels Association National Awards for Excellence, with Petition Kitchen also receiving a series of dining and architecture accolades.
More than 140 years old, the building sat unused for two decades until Adrian Fini led the development, completing works in 2015 as part of the $700 million Cathedral Square redevelopment.
Mr Fini’s penchant for heritage has continued to materialise across Perth, with Northbridge entertainment precinct The Rechabite (in collaboration with Marcus Canning) one of his recent revamps.
His latest project, Victoria House, part of DevelopmentWA’s Montario Quarter in Shenton Park, started construction this month.
Mr Fini’s company, Hesperia, has revamped the 1938 heritage-listed Victoria House site into 81 apartments, as well as 2,000 square metres of retail, hospitality and commercial areas.
Built in the 19th century, the State Buildings were revamped and reopened in 2015. Photos: Gabriel Oliveira (bottom), State Library (top)
Hesperia director Kyle Jeavons admits Mr Fini’s enthusiasm for heritage has rubbed off on him, bringing an understanding that heritage projects command a long-term development view, rather than the quick-return model generally sought in the property world.
“Without question, it’s a labour of love … the process, unearthing the history of the buildings, the challenges and the rest of it,” Mr Jeavons told Business News.
“We’ve always found a lot of personal enjoyment out of the challenge.
“Probably the [most] frustrating thing is while they are in either ownership or control of various authorities and are not looked after, when they’re then sold to a private developer the pressure comes on.
“The reality is the cost is significant to fix them, and there are a lot of unknowns, so people just don’t have that appetite.”
Mr Jeavons said while grants and planning concession incentives were limited, more developers and councils were beginning to understand and appreciate the value in heritage.
Nevertheless, the challenges and risks associated with heritage, which included building codes and disability access requirements, had not been a deterrent for Hesperia, with a series of historic buildings on William Street in Northbridge the group’s next likely redevelopment play, Mr Jeavons said.
“These buildings tell a story new buildings can’t,” he said.
“Overarchingly, you end up with something unique that has value. Whether that’s qualitative or quantitative, that’s hard to say.
“Technically, they become rarer and rarer, therefore we also have a generational view of heritage assets.
“And the relationship they can have with new architecture is pretty exceptional.”
Balancing act
The art of blending the old with the new has taken shape across Perth’s CBD in recent years. At one end of the city is design firm Buchan’s refit of the Melbourne Hotel on the corner of Milligan and Hay streets, and at the other is architect Woods Bagot’s restoration of the Palace Hotel on St Georges Terrace.
Julio’s restaurant in West Perth, is another example, with the rear of the 1902 house removed to integrate with the newly built Sage Hotel.
The project was completed by Australian Development Capital (ADC_) in 2016, and executive director Rod Hamersley said it was an example of how authorities and developers could work together to navigate heritage restrictions and regulations.
“Julio’s is a great example where the external fabric was seen as the most important component,” he said.
“There’s an acknowledgement that some things might have to be compromised to deliver an alternative outcome, but if we can retain a lot of the heritage fabric then at least that will stand the test of time.
“State and local authorities are a lot more amenable to repurposing ... acknowledging if [they don’t] come along on the journey with us, the assets just sit there and decay. I don’t think anyone wants to see that.”
Mr Hamersley said authorities had been far more proactive and accommodating in supporting heritage redevelopment in recent years, with a number of grants available as well as plot ratio bonuses (allowing for additional floor area), determined by each local council.
The state asset sale program, he said, was another factor that had likely contributed to the rise of restoration interest from the private sector.
“There’s always a cost in retaining those assets, so it’s not as economical as demolishing and building new but we see the upside in the other aspects like planning and yield,” Mr Hamersley said.
“It’s also provided character and differentiation between competitors.”
He said that differentiation had played a role in the 20 per cent uplift on the sale value of units at ADC_’s The Social apartments in Fremantle, completed earlier this year involving the restoration of the historic Fremantle Social Club facade.
Australian Development Capital contrasted the old with the new at its West Perth project. Photo: ADC_
ADC_ has continued to feed its appetite for heritage with two additional projects in its pipeline: the old lyric theatre in Maylands, and the mixed-use precinct on the former Perth Girls School site in East Perth.
Earlier this year, the state government adopted new planning guidelines for the site, which allows for 600-plus residential, hotel and commercial units across six towers, more than half a hectare of open public space, as well as plot ratio bonuses of up to 80,000sqm across the 1.8-hectare site.
Stage one of the project is due to commence in 2021.
New lease of life
There are several other significant heritage renewal projects collectively worth more than $300 million in WA’s pipeline.
As part of its $17 million Gallery House, Birchmead Property Group will retain and restore the original Edith Cowan residence: an 1883 house on Malcolm Street in West Perth, which will sit in front of a 13-storey, 21-apartment tower.
Originally, Birchmead proposed a hotel and demolition of the house, but those plans were revised to keep the house, which wasn’t heritage-listed at the time, after news of demolition prompted a call to register the property.
Birchmead head of property Joe Sanfilippo said the group worked with heritage stakeholders to incorporate the house in a new design, which received development approval in 2018.
The project is expected to launch in coming weeks and will be Birchmead’s first heritage-related project.
“We think it will be a drawcard for buyers, people have even asked about the house part itself,” Mr Sanfilippo said.
“There were some wonderful buildings that unfortunately were demolished in the CBD and new developments have gone up to replace them.
“When we see these buildings restored … it’s like looking at a piece of art that’s been around for hundreds of years; something generation after generation can continue to admire.”
The heritage-listed Florence Hummerston Lodge, built in the early 1900s, is also in line for a facelift as part of Rosewood Care Group’s $70 million 152-bed aged care redevelopment on Cleaver Street in West Perth.
Chief executive Mario Zulberti said the lodge was a part of the organisation’s history, with Rosewood having started its aged care journey at the 5,454sqm Cleaver Street site in the 1950s.
The lodge was previously home to the original Meals on Wheels service, and was named after its president and Perth’s first female city councillor, Florence Hummerston.
“I think there’s a big misconception that in order to make something modern you need to start from scratch. And we know in aged care, just because something is old, it still holds a lot of value,” Mr Zulberti said.
“When it comes to ‘heritage’, Perth is still a very young city. We should be protecting our past, in order to build a better city.”
Construction is under way, with Pindan expected to complete the new four-storey facility, which will wrap around the revamped lodge, by February 2021.
Also in the pipeline is the $218 million East Perth Power Station revitalisation, with the state government naming Tattarang (founded by Andrew Forrest) and Australian Capital Equity (chaired by Kerry Stokes) as preferred redevelopment partners for the mixed-use precinct in April.
The $218 million East Perth Power Station project is Perth's largest upcoming heritage redevelopment. Image: Kerry Hill Architects
The Fremantle Technical School could be set for a new life, too, with hospitality business Prendiville Group purchasing the site for $3.5 million in July, just down the road from the 1902-built Old Synagogue, which reopened in late 2019 as a hospitality destination after a $5 million restoration.
Last week, joint-venture partners Finbar and Ventrade Australia unveiled plans for the restoration of the Materials Science Building on Hay Street in East Perth.
Built in 1952 to house the state government’s industrial chemistry laboratory, the building will now mix substances of a different kind as a microbrewery, forming part of the developers’ proposed two-tower mixed-use project.
The WA Institute For Deaf Education at 53 Curtin Avenue in Cottesloe, built in the late 19th century, presents another potential upcoming heritage revamp.
The state government launched an expression of interest land sale campaign in mid-2018, however, a spokesperson told Business News negotiations were ongoing with a preferred proponent.
An expression of interest process to lease and adapt the Collie Roundhouse has recently been launched, closing November 16.
The roundhouse and turntable, built in the mid-1950s, were constructed to maintain 14 steam locomotives to service the coal industry.
An expressions of interest campaign has been launched to lease and adapt the Collie Roundhouse. Photo: Greg Davis
National Trust of Western Australia chief executive Julian Donaldson hopes interested investors and developers can transition its use from railway to tourism.
“A developer can enjoy distinct points of difference with a heritage-listed place,” Mr Donaldson said.
“But the advantages extend beyond this, with visual enhancements to the town, increased visitation and tourism expenditure.”
