The Capitol apartments will be built on the corner of London Circuit and Hobart Place, with four basement levels under the 14 storeys.

Demolition of the 1960s building on the site has begun, with the last of the tenants moving out in early October. Construction has started for smaller parts of the project and the building of apartments will start in early 2018, expected to be finished in late 2019.

Matt James, director of developer Crafted, said the Capitol would have a concierge service in the seven metre high lobby.

"Living in an apartment is hard when it comes to deliveries," Mr James said. "Residents will never miss another package delivery, or their online grocery delivery, as they will be stored in the building's cool room for when they arrive home from work," he said.

Crafted promises "a grand New York style entrance", with 2.7 metre ceilings, oak floors and use of stone inside.

The architect is Sydney-based Architectus, and the interior designer is Melbourne-based Fiona Lynch.

Crafted was the developer behind the Prince, a 150 apartment development at the Kingston Foreshore.

Chief Minister Andrew Barr said about 5000 people lived in the city, but more than 45,000 worked there.

"We want more people living in the CBD," Mr Barr said. "We'll be able to improve the transport functionality of the city if we have more people living within walking or cycling distance of where they work."

Mr James said 130 apartments had been sold since October 2016, with studio apartments start at $329,000 and four-bedroom apartments at $1.6 million.