An artist's impression of the new six-storey mixed-use Vantage development. Photo / Supplied
Nearly a third of 32 luxury apartments of a multimillion-dollar development planned for the CBD have sold, including one of the penthouses.
Demolition has begun on existing buildings at 359 Cameron Rd to make way for a new six-storey mixed-use apartment building.
Apartments are continuing to be snapped up across the CBD as more buyers seek inner-city lifestyles.
Tauranga City Council's building consent report for October showed $18 million was approved for stage two of the Cameron Rd development, including the fit-out of all levels.
It was part of more than $72m worth of building consents issued in October.
In September, the building was approved $3.9m for the demolition of existing buildings and structural site to make way for the new six-storey building.
Lead sales agent for the Vantage development on Cameron Rd, Theo Smith of Harcourts, said the development would include 32 luxury apartments, plus ground-floor offices and a cafe/restaurant.
Smith said one of the five penthouses had already sold off plans for just under $2.5m.
"We are about 30 per cent sold in the complex and a big part of downstairs in the office space has been leased out as well.
"We are in the process of working with a client for the restaurant space, which is going to be a huge drawcard for the area."
Smith said buyers were mostly local, and some were from Auckland and Hamilton.
Staff had moved out of the on-site sales office and were preparing the existing building for demolition, he said.
The luxury apartment block was designed for inner-city living and would help bring life back into the CBD, he said.
"It has been designed as a home rather than a holiday apartment. The unique thing is it does allow people to have small pets."
The development is hoped to be completed by 2022.
Apartments are selling off plans at another development on Elizabeth St.
Bayleys Tauranga's commercial manager Mark Walton said the 15 apartments as part of the Waikareao development on Elizabeth St were already under contract before being publicly marketed.
"That demonstrates the demand out there at the moment," he said.
The newly-completed $35m Latitude Residences on Park St achieved record sales with 27 out of 28 luxury freehold apartments selling before its completion.
Veros Property senior development manager Craig McCormick said the difference in two years since the Latitude Apartments were launched to market was phenomenal.
"There are more buyers who are seeking inner-city or fringe-CBD lifestyle.
"Latitude was ahead of the market, and has shown this type of development, if done well, really can attract strong buyer demand and interest."
McCormick said there was a shortage of listings and new standalone housing in the post-Covid residential market.
"The prospect of living in a city fringe apartment, and the lifestyle it offers, is becoming more attractive when compared to compact standalone housing in greenfield areas."
David Baker, director of Focus on Property which specialises in commercial investment and property management in Tauranga, said it was essential to create a busy and efficient city.
"I believe it will help relieve transport issues and housing supply shortage as these are projects that can get going now."
Baker said Plan Change 26, which would allow apartment buildings up to six storeys high in parts of the central city, was "a big step forward" to intensifying residential activities along the Te Papa Peninsula.
"I hope developers jump in and provide more affordable housing stock," he said.
"The flow-on effects would result in more hospitality, dining/bars, a downtown supermarket, events and general vibrancy to the CBD."
While he said it took confidence to buy a $1m-plus apartment off plans in the current CBD environment, the pre-sales achieved demonstrated buyers know how good central Tauranga could be and wanted to be part of making it a reality.
Baker said the demand in apartment living was because of a shortage of stock across all types of residential living.
"So people will miss out if they don't get in early."
Downtown Tauranga chairman Brian Berry said inner-city apartment living was essential for Tauranga to mature as a city.
"The number of inner-city dwellers needs to increase ten-fold to achieve the scale required to support the likes of a metro supermarket, an increased hospitality and entertainment offering, and a retail offering that needs to become speciality-focused, rather than competing against the offering in the suburban shopping centres."
Berry said with the large baby boomer generation either down-sizing or retiring and relocating to Tauranga, apartment living was becoming more "in vogue".
Plus, apartment living better enabled an active lifestyle without the time constraints of travel and section and dwelling maintenance, he said.
The council's Tauranga Urban Strategy recognised the growth the city has and will experience, Berry said.
"A significant part of this strategy is the intensification of the Te Papa Peninsula, which includes an 'up rather than out' focus that will enable greater intensification via apartment developments.
"While the harbour aspect of Tauranga does provide limitations for transport, etc, the associated geography does provide the opportunity for clear view shafts to the harbour and beyond, which is ideal for apartment developments."