Demolition work has begun on the former Track 2000 building in the Grangetown area of Cardiff.
Developer Rightacres will transform the warehouse, which closed earlier this year, into a complex of 74 flats known as The Bottle Works .
Proposals were previously put forward for an 86-unit development up to seven storeys high but this was revised down after a public consultation.
The flats will be mostly across five storeys but the building will be up to six storeys high at its tallest.
The plans for former bottleworks and cheese factory in Penarth Road were heavily criticised by residents who had fears over a lack of privacy and car parking spaces. The building will have 57 spaces.
Residents fear loss of privacy over plans to develop warehouse into 86 flats in Cardiff
An image of the Bottle Works proposal
How Track 2000 looks today
They also complained the design of the building is not in keeping with the area and this will pave the way for further high-rise buildings in Grangetown.
Previously, Judy Davies, who lives in nearby Pentre Gardens, said: "There is potential for up to 170 cars - where are they going to go? We've already got a bottleneck down here, especially when there are events on.
"We don't feel the infrastructure here can take it. We're not against the development. Something needs to be done, but the size and the scale of it is absolutely enormous. They are going to be able to see straight into our houses.
"We would just like to see it more in keeping with the area and not to saturate the area."
A study by Rightacres found the development would not have a significant effect on daylight or sunlight on neighbouring properties.
A building up to 12 storeys had been initially planned at the site before the scale of the development was reduced.
Rightacres, which is also behind plans to redevelop the Brains Brewery site and Cardiff Central Square, held a public consultation on the Track 2000 project before submitting its plans to Cardiff council.
