Pyrmont project Paragon to address ‘the missing middle’ in Sydney’s apartment market

Wanted: off-the-plan apartments with three or more bedrooms, luxury finishes, oodles of storage and entertaining spaces that won’t depress the heck out of buyers downsizing from large family homes.

Luke Berry, the director of sales and marketing for developer THIRDiGroup, describes the dearth of this style of apartment in Sydney as “the missing middle”.

Occupying a slice of the market between cookie-cutter small units and prestige penthouses, spacious high-end apartments and townhouses have been absent – or devilishly hard to find – in new developments in inner-ring suburbs of Sydney over the past few years.

Sydney has plenty of 'cookie-cutter' units built at low cost, but Luke Berry of THIRDi says many buyers want more.Sydney has plenty of ‘cookie-cutter’ units built at low cost, but Luke Berry of THIRDi says many buyers want more. Photo: Louie Douvis

“Last year, everyone was focused on SEPP 65 boxes,” Berry says, referring to state planning laws that allow developers to increase the number of apartments if a project meets certain design guidelines.

With investors and first-home buyers in mind, many developers have concentrated on reducing costs to provide a more impressive return on investment and the lowest possible mortgage repayments.

“This in our opinion created a race to the bottom, where architects were instructed to get approvals as fast as possible, with as many apartments as possible, to capitalise on this unprecedented interest in real estate,” Berry says.

Paragon apartments in Pyrmont are THIRDi's answer to "the missing middle" in Sydney's apartment market.Paragon apartments in Pyrmont are THIRDi’s answer to “the missing middle” in Sydney’s apartment market. Photo: Artist’s impression

“This compromised design, lowered the level of finishes and sacrificed space, the three things that are important to the other key buying market that had been patiently waiting for the music to stop on ‘tick box’ apartment selling: the established owner-occupier market.”

It typically takes about two years from development approval to construction completion. Many projects opening their doors to new residents today were planned before developers appreciated the magnitude of demand from cashed-up owner-occupiers, including empty nesters eager to ditch their big family homes without also ditching luxury and lifestyle.

Wanted: off-the-plan apartments with three or more bedrooms, luxury finishes, oodles of storage and entertaining spaces that won’t depress the heck out of buyers downsizing from large family homes.

Luke Berry, the director of sales and marketing for developer THIRDiGroup, describes the dearth of this style of apartment in Sydney as “the missing middle”.

Occupying a slice of the market between cookie-cutter small units and prestige penthouses, spacious high-end apartments and townhouses have been absent – or devilishly hard to find – in new developments in inner-ring suburbs of Sydney over the past few years.

Sydney has plenty of 'cookie-cutter' units built at low cost, but Luke Berry of THIRDi says many buyers want more.Sydney has plenty of ‘cookie-cutter’ units built at low cost, but Luke Berry of THIRDi says many buyers want more. Photo: Louie Douvis

“Last year, everyone was focused on SEPP 65 boxes,” Berry says, referring to state planning laws that allow developers to increase the number of apartments if a project meets certain design guidelines.

With investors and first-home buyers in mind, many developers have concentrated on reducing costs to provide a more impressive return on investment and the lowest possible mortgage repayments.

“This in our opinion created a race to the bottom, where architects were instructed to get approvals as fast as possible, with as many apartments as possible, to capitalise on this unprecedented interest in real estate,” Berry says.

Paragon apartments in Pyrmont are THIRDi's answer to "the missing middle" in Sydney's apartment market.Paragon apartments in Pyrmont are THIRDi’s answer to “the missing middle” in Sydney’s apartment market. Photo: Artist’s impression

“This compromised design, lowered the level of finishes and sacrificed space, the three things that are important to the other key buying market that had been patiently waiting for the music to stop on ‘tick box’ apartment selling: the established owner-occupier market.”

It typically takes about two years from development approval to construction completion. Many projects opening their doors to new residents today were planned before developers appreciated the magnitude of demand from cashed-up owner-occupiers, including empty nesters eager to ditch their big family homes without also ditching luxury and lifestyle.

It goes some way towards explaining anecdotal evidence from agents and developers that more buyers are snapping up smaller adjoining off-the-plan apartments with a view to removing walls to create spacious new homes.

Paragon will be a collection of 31 apartments and townhouses.Paragon will be a collection of 31 apartments and townhouses. Photo: Artist’s impression

“They might live in a $5 million to $10 million home on the city fringe, for example Mosman, Balmain or the eastern suburbs, and they’re looking for an inner-city location they can buy now and retire to,” Berry says. “They’ve lived in a big, beautiful home, they’ve raised a family and they’re used to having large living areas and al fresco dining spaces. They still want to feel like they have a flowing, open-plan property.”

With this market in mind, THIRDi Group is about to launch Paragon of Pyrmont, a collection of 31 apartments and townhouses, all but two of which have three or more bedrooms.

A commercial building will be knocked down to make way for 11 apartments, 20 townhouses and two commercial spaces in two low-rise buildings designed by SJB Architects, with interiors by SJB and Coco Republic and landscaping by Black Beetle.

Paragon's facade fronts are designed to maximise space and natural light.Paragon’s facade fronts are designed to maximise space and natural light. Photo: Artist’s impression

The inclusions list features a bevy of high-end suppliers. Bang & Olufsen entertainment units will rise from custom cabinetry at the press of a button, Gaggenau appliances are integrated into bespoke joinery and there are plans for TESLA PowerWalls and PowerPacks, private wine cellars and home automation technology fit for a secret agent.

Jonathan Richards, a director of interior design at SJB, says the project takes as its inspiration Pyrmont’s gritty personality, forged in its industrial past, beside the gleaming CBD.

“Rather than a monolithic new block, the architecture gives space to the public domain with open landscaped public walkways between the new buildings,” Richards says.

"We have designed the apartment interiors at Paragon to capture a sense of raw luxury," interior designer Jonathan Richards says.“We have designed the apartment interiors at Paragon to capture a sense of raw luxury,” interior designer Jonathan Richards says. Photo: Artist’s impression

The facade fronts are designed to maximise space and natural light. All apartments have floor to ceiling glazing spanning at least one, if not two street frontages. Articulated Nordic copper and bronzed screening allows residents to choose between privacy or inner-city views.

“We have designed the apartment interiors at Paragon to capture a sense of raw luxury,” Richards says. “These are not showy spaces – they have understated elegance with polished concrete floors, sweeping curved white walls and timber ceilings.”

Paragon is also expected to appeal to high net worth individuals, young professional singles and couples with no children and wealthy Australian-based Chinese buyers.

Treasurer Scott Morrison delivers the budget.Incentives for downsizers announced in the 2017 federal budget are expected to increase the demand for “middle market” apartments.Photo: Stefan Postles

Agent Ged Rockliff, head of residential for Savills, echoes Berry’s observation that there is a shortage of high-end, off-the-plan apartments, driven largely by lowly geared or debt-free downsizers who value privacy, seclusion and space.

“There are more buyers competing for small and smaller amounts of stock,” Rockliff says.

Location, as always, is another important factor. Pyrmont has undergone a remarkable transformation from harbourside hub of industry to lifestyle hotspot. Today, apartment buildings from the 1990s share the suburb with quaint Victorian terraces and ultra-modern office buildings.

The light rail stops at The Star casino. A crop of hip cafes, bars and restaurants has opened on Harris Street, Darling Harbour is shedding its daggy 1980s image and the Bays precinct, including Sydney Fish Market, is set for a dramatic revamp – all this and Paragon is less than 1.5 kilometres from Pitt Street Mall.

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