Malaysian developer OSK Property is firmly staking its $2.8 billion mixed-use complex Melbourne Square on a rise in owner-occupier demand with 78 per cent of apartments offered having two or more bedrooms.
OSK managing director Ju Yan said he expected the first phase of the super fund-backed project in Southbank's Kavanagh Street to launch in October with construction expected to start by year's end.
The six-tower project is one of the largest single development proposals in the state.
"We've taken a conscious view to design something that caters to owner-occupiers .. to include features, amenities, layouts that make apartments suitable," Mr Yan said.
OSK managing director Ju Yan at the site of its $2.8 billion Melbourne Square development in Southbank, Melbourne.
The first stage will include 1043 apartments on a podium that will house a full-line 4000 square metre supermarket and childcare centre enclosing a 3700sq m park.
"Southbank with its 20,400 residents has no full-line supermarket, there's a shortage of childcare, and there's no park.
"We expect to see in coming years, especially once we deliver the child care and supermarket, that there will be more downsizers, there will be more young families who want to live in a precinct," he said.
OSK recently gained backing for the decade-long project from Malaysia's largest pension fund, the Employees Provident Fund, which purchased a 49 per cent stake for $154 million.
Despite being listed on Malaysia's stock exchange, OSK is majority owned and run by Mr Yan's father, the tycoon Tan Sri Ong.
The group holds a 10 per cent stake in Malaysia's fourth largest bank as well as having interests in financial services, manufacturing, property development, construction and hospitality, owning six hotels in Malaysia and one in Sydney.
Melbourne Square is the group's first foray outside Malaysia.
Mr Yan is not concerned about warnings of a potential oversupply of apartments.
"We studied the numbers very carefully. We wanted to make sure we were making the right decision to come into the market."
The presence of Malaysia's top super fund was also a "vote of confidence", he said.
"They take a long-term view on all their investments.
"Vacancy rates are below 2 per cent. There are a number of structural positives .. You've got a strong economy, good healthcare, top-notch education system, great living environment, and lots of jobs."
OSK will fund the project through a consortium of offshore banks, he said.
The group was close to signing an operator on a long-term lease for the supermarket.
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