The Canberra Labor Club Group is set to cash in from an $11 million project to build a five-storey residential complex in a prime Braddon location.
Property industry insiders said the club group's first foray into residential development would provide healthy returns, with the 43 units to be built on the Torrens Street site tipped to sell for a combined $22 million.
Sales manager Keenan Veraar said a similar project on the market in Braddon had returned sales of $7000 per square metre.Credit: Elesa Kurtz
A development application lodged this month outlined the plans to demolish what is now a two-storey office building on the corner of Elouera and Torrens streets.
The brick offices, now leased by CGU Insurance, would be replaced by a mix of one-, two- and three-bedroom units, and basement parking with 60 spaces also to be added.
Residents would be less than 100 metres from Lonsdale Street and popular eating places including eighty-six, Grease Monkey and the Bentspoke pub.
LJ Hooker project marketing sales manager Keenan Veraar said units on the block would likely prove popular given its north-facing aspect and location next to a park.
"It'll be about $22 million, between $20 million to $22 million," he said.
"It's not their core business – you would have seen a developer approach them.
"We even see that with Mum and Dad [owned] blocks in the inner suburbs."
The $10.9 million construction project was on a block which last sold in 2003 for $2.1 million.
Mr Veraar said LJ Hooker was the agent for the 48-apartment Evoke project on a "mirror site" one block north, where one-bedroom sites had been selling for between $365,000 and $450,000 and two-bedroom dwellings with an ensuite for between $500,000 and $650,000.
Colliers International ACT chief executive Paul Powderly backed Mr Veraar's estimated price range for the project.
"It's a small scale development in the most popular redevelopment area in Canberra and will be well-received by the market," he said.
"Most of the clubs are doing these sorts of things to supplement their operational position."
Club group chief executive Arthur Roufagalis did not respond to calls and an email this week.
The group owns four licensed clubs, in Belconnen, the city, Charnwood and Weston Creek, but also owns several other commercial properties throughout the ACT, its website said.
The group made a $770,000 loss in 2013-14 on the back of a $2.5 million donation to the Labor Party investment vehicle, the 1973 Foundation.
Set up to support the ACT branch of the Labor Party, the club group's articles of association require any profits to be paid to the branch.
The group has traditionally made significant annual donations to a long list of community organisations.
Public submissions on the development can be received until October 16.