Developer CostaFox has received a permit to go ahead with a 145-office and warehouse strata unit project in Melbourne’s West Footscray.

Construction of the $100 million project in the inner western suburb is due to commence in the last quarter of this year on the 5.7-hectare site on Indwe Street that the developer purchased in 2016 for $10.3 million.

The West Footscray project is designed to capture businesses looking to relocate from urban renewal areas such as Fishermans Bend, Cremorne, Brunswick and North Melbourne, CostaFox managing director Michael Fox said.

“The land in those areas is no longer affordable for small businesses,” Mr Fox said. “Our West Footscray warehouse work spaces are designed for owner occupiers looking to be close to the city and with plenty of surrounding amenity.”

The warehouses are designed to look like apartments.

The project is part of the re-orientation of the country’s construction industry away from residential work into commercial work. The commercial building sector grew at its fastest pace in more than 12 years in March, the Australian Industry Group/Housing Industry Association Australian Performance of Construction Index showed earlier this month.

Commercial construction will surge this year on the back of new retail work, offsetting the weak residential and engineering sectors and halting a three-year decline in total building activity, Master Builders Australia said in February.

Even though appetite for residential work is waning, CostaFox engaged architects Rothelowman to design warehouses that would look like townhouses in the gentrifying western suburb.

“There are hundreds of new apartments under construction and the idea is for people to be able to work and live in the same area,” Mr Fox said.

CostaFox recently purchased a site in Cremorne for $12 million to develop a 6000 square metre office building.

Last week Mr Fox’s former business partner, Rich List developer Paul Little, got a permit to build a new 30-storey hotel off Melbourne’s Flinders Lane, after amending the permit that came with the 9-27 Downie Street site for an apartment tower.

The slowing market for apartments – which has left more than one-quarter of apartments unsold in developer Fragrance’s nearby “Beyonce” tower – is hastening a trend away from residential in the Melbourne CBD that started in 2015 after overnight planning changes to density ratios prompted developers to look at other uses for sites.