It's been a long wait but work has begun on the Green Square town centre, the centerpeice of Australia's largest urban renewal project in the newly dubbed "inner South Sydney".

Set to be home to 5500 people with offices for 7000 as well as plazas, shops, restaurants and parks flanking the Green Square rail station, the $1.7 billion, 14.7-hectare town centre is about to take shape.

"There is a hum of excitement around here," says Landcom's Paul Anderson, who is in charge of the monster 10-yr development at Zetland. "That comes from the anticipation as we start transforming Green Square town centre into Sydney's first global village with all the hallmarks of sustainability and vitality".

THE FOCUS FOR GREEN SQUARE

The town centre, site of the old Waterloo incinerator will lie at the hub of the 278-hectare Green Square precinct in Sydney's oldest industrial area, which is projected to house about 28,000 residents and 22,000 employees by 2031.

With about 9000 people already living in Green Square, which is 4.5 kilometers south of the CBD and includes sites such as the new Victoria Park as well as the suburbs of Zetland, Beaconsfield and parts of Alexandria, Rosebery and Waterloo, the new town centre will provide the focus for the whole scheme. Its prospects were boosted again recently with the news that a high-capacity bus or light-rail service, linked to Central and encircling Moore Park, Eveleigh, Surry Hills and Zetland, is being discussed by the state Government and the city of Sydney.

Mayor Clover Moore is enthusiastic. "The community has been clear: they wanted a sustainable urban landscape," she says.

"The new town centre to be delivered by the city and Landcom will add to the vitality and mix of our City of Villages with its own unique function and character."

Already, sales of apartments being built on the town centre's fringe echo that confidence despite the grim forecasts for the rest of the economy. Interest in the 56-unit five and seven-story Bowral Blue development Allure, just 200 metres from the railway station, has been high even though its display apartment only opens today.

"We've sold almost half already," says Nick Andriotakis, directors of developers Lateral Corporation. "We've always made sure that what we build is achievable and affordable and there is a real lack of supply of new apartments.

"Sales have started over the last few months and we've had return clients and people who know about us from other developments."

Nearby, the first stage of homes in the Garland Quarter is being finished.

Seven deposits have been taken on 30 Ed Lippmann-designed New York-style loft apartments overlooking a piazza.

Developer Phillip Bartlett says there's a real belief in the area. “A lot of people are now beginning to appreciate that the area has links to the whole of the city and inner city," he says.

It's now attracting many of those people who might have wanted to live in Paddington but who can’t afford it. People like young professionals who don’t want to live in the suburbs.

It takes a while for places like this to register in people's psyche; 15years ago no one wanted to live in Pyrmont and now look at it! But sites for new housing are limited and this is close to the city, with three big universities and 60 per cent of the state's employment sites within five kilometres and four big teaching hospitals within range. Why live further out and commute?

The $200 million Garland development will include 24 three-story Alex Popov terraces, about to start construction, and an eight-story tower containing 77 apartments that will be launched later this year.

GREEN CENTRE, GREEN LIGHT

Within weeks, Landcom will announce which developer-builder from a shortlist of three terms-Lend Lease, Mirvac/Leighton Properties and Citta/Babcock and Brown- won the bidding to be its private-sector joint venture partner in the development of the town centre.

Anderson says although it might not seem the best timing, with so much nervousness in world capital markets, he's confident the timetable of building works will be met. He says 2012-2013 is the goal. .

"Look at Victoria Park," he says. "That's fully subscribed. Now every site has either been activated or on-sold to a new developer who's made applications to the council. Over the next five years of the project, it will be totally built out."

Many property analysts are also confident of the town centre's prospects. Cameron Kusher of RP Data says other Sydney regeneration areas such as Pyrmont and Woolloomooloo have done well and there's every reason to expect Green Square will do the same. He says the median price of a unit in Zetland has risen 8.25 per cent over the past year to $525,000 and, in Beaconsfield, almost 26 per cent to $526,000.

"All the areas in Green Square have performed fairly well and it definitely looks like a good investment," he says. "The best way is always to get in early in the new urban areas and prices will lift as retail comes in."

Colliers International's Murray Wood is similarly upbeat. “The town centre will do better then some people might have thought as everyone is finally coming to grips with the fact that we are heading into a major undersupply [of dwellings] situation. With interest rates and good yields and so there's a lot of off-the-plan activity too."

The managing director of estate agents CB Richard Ellis Residential, David Milton, says professionals and first-home buyers are increasingly eyeing the town centre and its immediate environs.

"What would people choose : an affordable new unit with a lot of space and a big balcony with well-planned inside-outside living, or a tiny unit in a 40-year-old crumbling block that needs a lot of work in the eastern suburbs?" asks Milton.

" We're finding a lot of people are coming here out of the eastern suburbs. The future is very, very positive."