Buxton building Melbourne’s next boom suburb from the ground up
The Australian, Thursday 10 July 2014.
BRW rich lister Michael Buxton has a pretty good track record at picking Melbourne’s future boom suburbs.
The company that he founded with his brother Andrew in 1995, MAB Corporation, was one of the first groups to develop apartments in the now gentrified bayside suburbs of Port Melbourne and Docklands.
Melbourne property runs in Buxton’s blood. In the 1850s his ancestors WP Buckhurst and JR Buxton subdivided and sold property in Port Melbourne, South Melbourne and Albert Park.
And that’s really where the family worked and lived for generations; we were all brought up in Brighton and were close to the sea, Buxton says.
“When you take my kids into (account) there have been six generations that have been in the same industry.”
Buxton said MAB Corporation is building what he thinks will be the next boom suburb: a masterplanned city called Merrifield that is being developed on a 1000ha block about 30km from the Melbourne CBD.
The $5 billion project eventually will have 4000 new homes, anemployment base of about 20,000 and a master-planned city centre that will start in 2018, Buxton says.
“Our long-term vision is to create the CBD hub of the north in a 24-hour city,” Buxton says.
“If you’re able to picture 20 years in (the future) we would hope that it has a university, hospital, private and public schools, sporting facilities and office buildings,” he adds.
About 200 homes have sold in the development’s first stage of marketing. Buxton’s earlier company Becton Property Group, started with fellow BRW rich-lister and property magnate Max Beck in 1976, grew during the next two decades from a small construction business to a national and diversified development group completing $4 billion worth of projects.
Both Buxton and his brother, Andrew, retired from their respective careers in 1995 and eventually decided to go into business together, creating MAB, with the name an acronym for Michael and Andrew Buxton. Its first development was an apartment project in Port Melbourne, called The Anchorage, where an industrial site was rezoned and a 600-apartment project developed.
“That was the very start of the (apartment) development in Port Melbourne,” Buxton says.
“We were definitely the first and that began the huge wave of conversions from industrial to residential.”
“We saw it as Melbourne was growing and needed to change. (Most of) the industrial was redundant.”
The group began to explore other avenues of development, and have completed industrial, office and shopping centre projects.
Residential projects remain its backbone, Buxton says, comprising about two-thirds of the company’s revenue. In 2002, the group bought a site at the then desolate harbourfront in Docklands.
It was the first to market apartments at the precinct, Buxton says, and eventually will complete 5000 units. MAB has built restaurants and bars at the precinct, as well as an office building and two serviced apartment towers.
Despite pessimism from economists about an apartment glut in Docklands, Buxton says that the area will never be overdeveloped.
“Docklands is definitely not oversupplied because ther’s a limit on how much you can build,” he says.
“If you look at (the apartments in our development) the vacancy rates are about 1 per cent.”
MAB also has built nearly 80 per cent of another masterplanned community at University Hill, 35km from the CBD. While the government wanted to open the land up for employment purposes, Buxton says the company was convinced that a residential component was key to achieving that.
“Modern employment today is not just factories, it’s actually retail, office, industrial, and therefore you need housing.”
“We convinced them that you had to have all segments going in one area and we actually proved that because no one was building any office buildings in these northern suburbs of Melbourne, but I think we’re building our fifth one.”
The Property Council of Australia named University Hill as the 2011 best master-planned community.
There are already up to 1000 people living at the area, Buxton says.
While there appear to be too many apartments being built in the Melbourne CBD, it is balanced by people wanting to live in apartments instead of houses, he says.
“What we do understand, and what the economists don’t understand, is that there is a change of trend of the way people are living.”