Melbourne building company Lucent Capital has combined two developments and become the first developer to be granted a licence for a Nightingale housing project, in this case the Nightingale Brunswick East development in Victoria.
According to Lucent Capital managing director Panos Miltiadou, one reason his company managed to obtain a licence for Nightingale Brunswick East is because “our brief for the original [non-Nightingale] design, done in conjunction with Collingwood-based architects ClarkeHopkinsClarke fitted in very closely with [the philosophy of] Breathe Architecture.”
“There was definitely a synergy there,” says Miltiadou.
And while the change of pace to a more community-focused, sustainable and collaborative design was not hard for Lucent to embrace – as Miltiadou says, “it’s something I’m very proud of”, the biggest hurdle had to do with obtaining the financing.
While the Nightingale model limits the profit on cost to 15 percent, according to Miltiadou, “none of the banks or other traditional lenders will look at your project if the profit on cost is under 17.5 percent.”
Therefore, he says, when it came to the financing part of the project, Lucent combined the two adjoining projects - one half a non-Nightingale but still 7.5-star NatHERS project, and the other half being the Nightingale build, all up totalling just under 70 apartments.
More importantly, the profit on cost came up to the magical 17.5 percent minimum, thereby allowing Lucent to be able to finance both builds.
Originally designed as a not-for-profit social enterprise that promotes high-quality communally-orientated housing that is ecologically, socially and financially sustainable, Nightingale says that it licences its model to “architects and consortiums committed to better, more sustainable urban housing.”
Miltiadou says he expects to make $1.2 million less than he would on a traditional design and build model, at the same time, the sustainable and communal nature of the Nightingale design means that sales will be faster and require a lot less effort.
“The Nightingale design certainly de-risks your sales,” he says, adding that the power of the concept out in the market was “phenomenal.”
Moreover, since it has become a by-word for sustainable design with its many awards and wide acclaim, there are also substantial savings to be had on the usual raft of marketing, commission and advertising costs.
“In many ways, this was a test case,” says Miltiadou, “to see whether it was possible to get traditional lender funding for a sustainable development like Nightingale, and we have proved that you can.”
Construction is set to begin in February 2018 and completion of the project is slated for September 2019.
