Completion of FKP’s apartment project Aerial in Camberwell Junction delayed

FKP’s $150 million Melbourne apartment project Aerial is running behind schedule and settlements will now occur in October, the diversified Queensland-based property group has revealed.

The project was due to be completed in the first quarter of the 2012-13 financial year, but settlements will now only occur in the second quarter.

“The external building company contracted to the Aerial project has now advised that practical completion will be delayed until September 2012, with settlements commencing in October 2012,” said FKP in a statement to the ASX.

The project is being built by Melbourne family-owned building firm Hanson Yuncken, which dates back to 1918 and has completed more than 4,500 projects.

Property Observer understands that weather and union issues may have contributed to the delay with Hanson Yuncken bringing across additional staff from NSW to get the project finished.

“FKP remains committed to delivering a high quality product to the market. Aerial is over 85% pre-sold,” says the developer.

“Given that Aerial will settle after the 2012 financial year, second half distribution is due to be paid, the board has deemed it appropriate to reduce the 2012 financial year second-half distribution from 1.9¢ per share as previously advised at the half year results announcement in February 2012 to 1.4¢ per share bringing the total estimated distribution for the 2012 financial year to 2.8¢ per share.”

FKP’s full-year profit guidance remains unchanged as stated in its half-year results.

The developer says it will deliver an underlying profit after tax in the range of $91.9 million to $104.3 million.

Aerial features 144 individual apartments with a selection of one-, two-, three-bedroom apartments as well as sub-penthouses and penthouses rising above Camberwell Junction.

Around 95% of the sales have been to local buyers, with a mix of owner-occupiers and investors purchasing the apartments.

Commercial retail space has been leased to audio retailer Bang & Olufsen and Jetts Gym. The Meat & Wine Company will lease heritage-listed English, Scottish and Australian (ES&A) Bank building, which has been converted into restaurant space by architects Wood Marsh.

The series of striking, elliptical glass building was designed by architects Woods Marsh and includes two towers, the tallest rising 14 levels.

It is being developed on the former Henley Honda dealership site at the intersection of Burke, Camberwell and Riversdale roads.

In 2009 FKP successfully lobbied the Victorian Civil and Administrative Tribunal (VCAT) to boost the number of apartments in the project by 40% to 144.

FKP had to fight off local residents opposed to the development to win approval for the scheme.