Michael Fox, the co-founder and former chief executive of Little Projects is buying development sites whilst his ex-business partner, and one-time chief executive of Toll, Paul Little, is selling.

Since leaving Little in November last year, Mr Fox has started his own development outfit, CostaFox with his new joint venture partner, Costa Asset Management which is headed up by Robert Costa, from the prominent Geelong family whose agriculture business Costa Group was floated on the ASX.

At the same time, Mr Little, his former partner of 18 years, has put up a 940-unit Fishermans Bend site in Melbourne – a site with which Mr Fox was "intimately involved".

CostaFox would have gone about business quietly had it not picked up a trophy waterfront site at Bower Street in Sydney's Manly for $13.1 million at auction last Thursday, $3 million cheaper than its last sale in 2015 as a result of a liquidation.

The 1189sq m site has approval for a four-level luxury residential building with six apartments each priced between $7 to $8 million.

The price tag will be justified by the size of the apartments, the views over the ocean and Shelly and Manly beaches, and by designs from award-winning architect Koichi Takada.

"It's rare to find an opportunity to buy a 300sqm apartment in such an incredible location," Mr Fox said.

"Here we want to create better apartments than what everyone else is developing."

"I want to design them like I would design a boat – once you walk in the door, you have a place to hang your jacket, put down your keys . . . I want to take it to another level."

Mr Fox said the Sydney housing market has room for more prestige homes. Cashed up downsizers and empty-nesters as well as foreign buyers are still looking for "boutique and unique" homes.

"That's why we picked Koichi Takada because he can put in more refined, and delicate interiors."

Judging from interests in his apartments – three are nearly sold – Mr Fox is certain the Sydney market will remain buoyant.

"There's no oversupply and we cannot underestimate the swell of migration," he said.

He and partner Robert Costa, who he met through friends, are looking for more sites for luxury residential projects and industrial development.

They are eyeing a 70-unit mixed-use site on Bay Street in Port Melbourne, and their industrial focus is for diversification, which sits well with Mr Fox's former port and rail property expertise.

When asked if he would buy back the Fishermans Bend site he did not answer but said: "It's a cracking site."