Lockdowns Fuel ​​$140m in Sales at Riverlee’s $550m Seafarers Project

Developer Riverlee has broken ground on its $550-million apartment and hotel project in central Melbourne, Seafarers, following a turbulent, but ultimately fruitful, sales campaign.

Riverlee development director David Lee told The Urban Developer the project, which would be built around a restored maritime goods shed, had struck a chord with local owner-occupiers wanting hotel-branded amenities and services in the heart of a city.

“The sales process for this project, at the height of a pandemic, has been nothing short of surprising and very interesting to watch as there has been a lot of pent-up demand,” Lee said.

“The owner-occupier market is now being driven by quality, location and amenity so each time we would experience a lockdown, enquiries would spike, and following each lockdown, the market would re-energise with buyers eager to sign contracts.”

Since October, when Melbourne’s last lockdown ended, Riverlee has captured $30 million in sales through its marketing campaign managed by Colliers.

Over half of the residences released to market in the Fender Katsalidis-designed development have now been purchased— totalling $140 million in sales.

Lee said the project’s two-bedroom configuration had been the most sought-after with apartments positioned on the building’s corners, holding multiple views, selling for as much as $18,000 per square metre.

Riverlee is now in the final design phases of its penthouse floor with intentions to release the four-bedroom configurations to the market later this year.

“The most active demographic purchasing at Seafarers have been business owners or managers with new found flexibility, wanting to retain the luxury lifestyle in central Melbourne,” Lee said.

“They are locals who have during the pandemic moved to the coast or the country but are wanting to stay connected to the city, using Seafarers as a bolthole.”

The group has also managed to successfully navigate a volatile construction market as supply chain constraints continue to place upward pressures on developers and builders.

Over the past 12 months Riverlee has been forced to make cost plan adjustments to the tune of 2 per cent.

In January, Riverlee appointed Icon Construction, backed by the Japanese-owned Kajima, as the project’s builder.

Lee said the appointed would have been made earlier, but instead chose to wait until there was more certainty around rising construction costs.

“When tenders closed in August the contract prices were still above the cost plan allowances,” he said.

“The products and materials are available, they are just taking longer to arrive and for that reason pressure hasn’t abated.”

Seafarers is now Melbourne’s largest private construction project to kick off since the start of the pandemic.

It will also feature an Australian first, a 277-guest room 1 Hotel—a hotel brand which already has a presence in North America and Europe.

The hotel will include a state-of-the-art wellness centre, a ground-floor, 1000-seat function centre, plus a variety of dining options and lobby bar.

It will be operated by Starwood Capital affiliate SH Hotels and Resorts under a long-term management agreement with Riverlee.

Lee said the hotel, upon completion in 2024, would be arriving into a transformed tourism landscape and invigorated hotel market.

“The worst is now behind us and in two and a bit years when Seafarers is complete I’m confident we will be opening the doors to a healthy market of international and domestic travellers,” Lee said.

“What will give this hotel a point of difference is that 1 Hotel is a concept unlike anything else in the Australian hotel market.”

Riverlee intends to retain the hotel as a generational asset.