16th July 2020.
Most entrepreneurs advise against mixing business with pleasure but Sirona Capital managing director Matthew McNeilly admits he’s let that notion slide as of late.
After a decade in the works, the group’s $270 million Kings Square revitalisation, in partnership with the City of Fremantle, is nearing completion with its FOMO retail precinct expected to open in early 2021. However, Mr. McNeilly’s self-confessed “love affair” with Fremantle predates Kings Square.
“I’m invested emotionally which, as a property developer, you should probably never invest emotionally,” Mr. McNeilly told Business News.
“Fremantle to me is just this really intricate web of people with stories and backgrounds.
“I guess anyone from Western Australia seems to have some affinity with Freo – whether that’s through grandparents or migration through the port in the 1950s, which was the case for me with my own mother.
“There’s all of that rich fabric that is impossible to replicate, particularly in what is a relatively new country like Australia.”
Mr. McNeilly said the appeal was also grounded in Fremantle’s “interesting mix” of being a port city, a university town, an arts and culture hub and a haven for heritage buildings.
“I’ve always had a bit of a penchant for urban renewal. Fremantle 10 years ago was a pretty rundown, underdeveloped place,” he said.
“I saw there was an opportunity to do something that would create good in this world and have a really positive social, sustainable impact.”
As part of that vision, Mr. McNeilly said he had focused on re-engaging the ‘day tripper’.
Providing commercial office space, in addition to Kings Square’s retail and civic offerings, was a key driver.
The Department of Communities has since relocated its head office to Kings Square, the move bringing more than 1,500 state government workers into Fremantle.
Mr. McNeilly said the next step was building a strong residential base within the CBD.
He said he had a number of sites in and around Fremantle he was considering for residential development.
“That’s probably been the third wave of my strategy for Fremantle as commercial office gets more workers in, creating that Monday-to-Friday economy,” he said.
“I think we’re maybe 24 months away from Freo really being a return to its former glory and my reference point is a misspent youth during the America’s Cup.
“I can now see Freo being as vibrant, as welcoming and exciting as it was three decades ago.”
Since Sirona Capital’s investment, a crop of property developments has started to take shape in and around Fremantle
Recently completed projects include Nokturnl Events’ $5 million facelift of The Old Synagogue, which had sat empty for about 20 years before reopening late last year as a 1,000-capacity hospitality precinct opposite the Fremantle Markets.
Nearby, another heritage-listed property, the former courthouse building on Henderson Street, is set to be given a new lease on life.
Karl Bullers, who owns and operates the National Hotel on High Street, is leading the project and in May unveiled plans to re-imagine the historic courtrooms into a hospitality offering expected to open in early 2021.
Mr. Bullers said developments like The Old Synagogue and Kings Square had given him renewed confidence in Fremantle.
“I feel that Fremantle is positioned as one of the best suburbs for growth in the next 5 to 10 years,” Mr. Bullers told Business News.
“Fremantle has benefited from the lack of investment in the 60s and 70s.
“When Perth was getting flattened and developed, Freo was starved of that but now it’s got those buildings. “And I think the general public has got a real thirst for finding out about it (heritage).”
Mr. Bullers sits on Fremantle’s Destination Marketing Group and said the variety of property projects had a huge role to play in attracting both local and international visitors.
“The whole point of marketing is to get more people into Fremantle,” he said. “I’m certainly already noticing a boost.
“It should be the second city of WA and I’d like to see that pushed harder.”
Mr. Bullers is leasing the old courthouse from Silverleaf Investments, which also owns the police station and barracks (and is seeking tenant expressions of interest), as well as the Warders Cottages nearby.
The company recently completed the redevelopment of the Manning Buildings on High Street, resurrecting the upper floors of six buildings built in the 1890s into new commercial office space as well as giving the street level retail a facelift.
Director Gerard O’Brien said Fremantle had experienced a few growing pains in the transition to a renewed city. “We were 30,000 people, 25 per cent of the population back in 1930 – we were the capital city,” Mr. O’Brien told Business News.
“Then that moved to Perth. If you go back to 1930 and said well what was Armadale – a shed, a dog and maybe two people? To date (it’s now) 100,000.
“Fremantle hasn’t moved in population. “We had Boans, department stores … probably 40 hotels, Fremantle was really a hub.
America’s Cup gave it a bit of a lift, but in the last 20 years we’ve just not understood or adapted.”
Silverleaf’s proposal to redevelop the Woolstores Shopping Centre was knocked back for height in 2018 but a revised development application was approved this year.
Plans for the Woolstores to house the police station were then axed by the state government, and the station is now expected to be on the Stan Riley site near Fremantle Oval.
Mr. O’Brien said he had since gone back to the drawing board, replacing the police station with a build-to-rent concept.
Fremantle’s biggest challenge, he said, was facilitating an ideological shift, with his development application experiences taking four to five years to get approval, with a list of requirements that had often made his “eyes water” when it came to feasibility.
“By that point, the tenants have moved on and the plans need to change,” he said. "It will get there and it’s improving. Eventually the rising tide lifts all boats.
“The key to all of this is to support the tenants, businesses that will give us jobs and an economy.”
Fremantle Chamber of Commerce chief executive Danicia Quinlan welcomed the recent wave of property investment and development and said it would help ease some of the financial pressures placed on local businesses.
“With nine-to-five workers coming through it takes Fremantle away from where we’ve got to from being a ‘weekend economy’ to having something more sustainable mid-week,” Ms. Quinlan told Business News.
“We would love to see Fremantle vibrant with workers, residents and a sense of rate base that enables the city of Fremantle to do the work they need to do.
“Without a residential rate base, it means that businesses are paying so much more than they should be to maintain what really is a state asset.
“Traditionally, we haven’t had the housing stock or the availability to enable a strong residential centre.” That’s starting to change, with about 400 apartments in the pipeline in and around Fremantle’s CBD.
The largest of these is the $129 million joint project by the Department of Communities and Edge Visionary Living, which will deliver 265 apartments across five buildings on Burt Street.
Projects under construction include Yolk Property Group’s eight-storey, 70-apartment Little Lane, which managing director Pete Adams said would be the first new residential offering around the Kings Square locality in a long time.
Yolk has several other Fremantle projects in the pipeline, including the timber-framed voice harbour and a development application in the works for a 100-room hotel.
“Fremantle’s unique identity is a big drawcard,” Mr. Adams said.
“Over the past decade or so, the City of Fremantle, both elected members and staff, has made very positive steps towards creating a modern, liveable and walkable city.
“Knowing the city encourages change gave us the confidence to invest and continue to invest in Fremantle.”
M/Group has embarked on its sixth residential project for Fremantle with M/27 by Match on Parry Street, a 40- apartment conservation of the heritage-listed substation.
Previous developments include Heirloom by Match, which received awards for its adaptive reuse of the Dalgety Wool Stores.
“Match identified the city’s potential a long time ago but knew it would take capacity to build capacity,” managing director Lloyd Clark told Business News.
“It is so great to see what has emerged since we arrived over a decade ago.” Mr. Clark said good planning underpinned the success of any environment.
“What many might not realise is that what we are seeing now is the result of a considered approach that has been in the works for over a decade,” he said.
“There have been many bold moves taken over the years by the City of Fremantle, so it’s great to see everything come together for them and the community.”
One of those moves was making what City of Fremantle mayor Brad Pettitt calls the “biggest change to the planning scheme ever” in 2013, removing the two to three-storey height restrictions in some pockets of Fremantle.
“It was a big jump and really controversial but absolutely necessary – it’s been the foundation of the $1-billion- plus development pipeline that’s now floating through the city,” Mr. Pettitt told Business News.
“Change is inevitable but you’ve got to make sure the change happens in a way that keeps the best of Fremantle.”
To ease community angst around protecting Fremantle’s character, Mr. Pettitt said the city had implemented strict guidelines on design excellence, which had so far highlighted the way in which interesting contemporary design could appropriately sit beside heritage.
“It’s always a bit of a balancing act getting the height, densities and incentives right,” he said. “There’s a long way to go still but I feel like it’s heading in the right direction.
“There’s these great new venues using old buildings in creative ways and that’s where Freo’s got the best bones – you can’t just find an old synagogue lying around in every city.”
Mr. Pettitt said he was optimistic for Fremantle’s future considering the city had attracted a solid pipeline of projects amid relatively challenging economic conditions, including the pandemic.
This included the recent purchase of a prime 2,444-square metre-site on Fremantle’s main South Terrace strip, home to the former Fremantle Technical School, with the sale due to settle by the end of July.
LJ Hooker Commercial Perth director Brian Neo told Business News while he was unable to disclose the sale price, the agency had received about 65 inquiries from local, national and international parties.
When asked about the investor’s identity, Mr. Neo said the buyer “employs several thousand employees throughout Australia” and that it had earmarked the site for development of its corporate headquarters
There are several more sites in Fremantle earmarked for potential redevelopment by some of Perth’s most prominent property players.
Andrew Forrest has spent about $15 million curating a collection of Fremantle property assets via his investment group Tattarang, the latest addition being the $7.6 million acquisition of The Spicer Site on Henderson Street.
That deal added to two other properties acquired in 2018; High Street’s Bar Orient, purchased for $4.6 million, and a property at 45 Phillimore Street, bought for $2.7 million.
While it was too early to comment on redevelopment plans, Tattarang chief investment officer John Hartman said the group was looking forward to working with council and local businesses to realise the group’s vision for Fremantle.
“Fremantle’s development potential has long sat untapped,” Mr. Hartman told Business News.
“The vibrant community hub taking shape in Fremantle presents a compelling long-term investment opportunity.
“Fremantle offers a point of difference and authenticity that very few places in WA can replicate.”
Last year, AMB Capital Partners, the investment business belonging to the Bennett family, started consulting the public on its Harbour Connect project, set to activate a 21,500sqm waterfront site next to Little Creatures.
Across the road, Adrian Fini through Fini Group (now Hesperia) entered a three-way memorandum of understanding with the Italian Club and the City of Fremantle in 2019.
The Italian Club revamp will follow a list of Fini-driven projects in the area, including as one of the original founders of Little Creatures.
Hesperia director Kyle Jeavons said the group was now working on a “modern interpretation” of an Italian Club that sought to invite the public in, with plans for a residential and hotel component, as well as a space for sports synonymous with Italian culture, like soccer and bocce.
“This is a great opportunity to revitalise that Italian character within the area,” Mr. Jeavons told Business News.
“Over the past 30 years, Fini Group has had projects across Fremantle so we see it as a pretty amazing place, albeit it’s had its challenges over the last 15-20 years.
“But, at the same time, it’s got some fundamentals pretty conducive to creating a great town.”
Mr. Jeavons said Fremantle’s heritage and history would remain major drawcards for ongoing property investment.
“Places like Freo are becoming rarer and rarer,” he said.
“As Perth has begun to mature, people have started to realise that these places with a history do have an inherent value.
“And there’s a chance to build upon that.”