The initial six-storey development, Alluvion on Lonsdale, is expected to be completed before the end of 2014.

Creative director and one of the owners of the Lonsdale Street properties, Nick Bulum, was happy to see demolition works begin last week. He said it had taken about 10 years to get to this stage and would be another year-and-a-half until Alluvion was completed.

“But it's finally happening so it doesn't feel that long now after the wait,” he said.

More than half of the 52 apartments in Alluvion have already sold. Along with apartments, the development will feature office space, an arcade, studio spaces and a range of restaurants and bars.

Canberra architect Fred Kasparek designed the initial development at 28 and 30 Lonsdale Street, which will undergo a "facelift" on the exterior to separate it from the Mode 3 development recently completed next door.

Mr Bulum said it was important to him that Canberra architects and interior designers were used.

“I want to show that Canberra can do it independently, on its own, without help from Sydney or Melbourne and no one can say 'it's so Melbourne or Sydney' – it's just Canberra,” he said.

Most of the businesses currently in the Lonsdale Street Traders warehouse across the road will move into Alluvion once it's complete, according to Mr Bulum. He said the vision for both the Braddon developments was to involve local, independent stores.

“If you look at some of these independent businesses, they give you more variety than what you can get in Sydney and Melbourne anyway because they've turned chain wherever you go – even the laneways are filled with chain stores there,” he said.

Once the Lonsdale Street Traders have moved across the street, the warehouse site and a number of surrounding buildings will be demolished to make way for the Palco Apartments.

The development will house 80 apartments and feature two laneways with a mixture of retail and dining spaces.

“Obviously we don't have the laneways of Melbourne, but we wanted to create a new way to use a laneway,” Mr Bulum said.

“It's sort of a new concept for retails – there's little pods in front of a strip of shops, there's a day spa, a boutique hotel with a little swimming pool bar on the second floor, and there's this little cave concept of restaurants that has an internal courtyard. This building's going to be amazing.”

Mr Bulum moved back to Canberra after having lived in Sydney for 12 years and Melbourne for two and said while they were great cities there was no reason Canberra couldn't be as great.

“Canberra has the potential, it just needs the support,” he said.

- The Chronicle