A massive development is up for grabs in a premium location just over 5km out of the Melbourne CBD

For decades the red brick walls and chimney of the Amcor Paper Mill dominated the skyline of Melbourne’s inner-east but a new mega development is set to give the area a facelift.

An artist's rendition of what Yarra Village will look like when it is completed.

A site once synonymous with the vast red brick walls and smoke stack of the old Amcor Paper Mill is set to be transformed into a massive $500m residential, retail and commercial precinct.

Yarra Village at 640 Heidelberg Rd, Alphington is just 6km from the CBD and forms the centrepiece of a mini-suburb featuring up to 2500 town houses and apartments being built on a 16.5ha block of land that used to be home to the paper mill.

The iconic paper mill closed in 2012 and the site has gradually been developed, with Yarra Village the crown jewell.

The old Amcor Paper Mill site in Alphington is set to have its transformation complete with the development of the new Yarra Village. Picture: Paul Loughnan

JLL’s head of capital markets Victoria Josh Rutman said the development was exactly what the housing market needed.

“In the context of the current debate about the housing crisis for Australians, this … is exactly what the market has been crying out for. It provides immediate access to … deliver a diverse mix of residential product,” Mr Rutman said.

As part of the transformation, a deal has already been agreed with Coles to build a new supermarket, and there is an agreement to lease in place with Aldi, ensuring a boost in shopping options for future residents.

The iconic paper mill dominated the skyline of Melbourne’s innereast but a new mega development is set to give the area a facelift. Picture: Mark Wilson

“Yarra Village will complete the broader project and mark the precinct as a highly desirable destination to live, shop and play,” said Mr Rutman.

The median cost for a house in Alphington is a $2.1m with units going for $775,000.

Registrations of interest for the development close on June 19.