THE view from the new apartment on the Venetian island of Giudecca could not have been more serene - until a jarring note was struck by Piero, my property guide. “This was a factory where they made the tops of bombs.” He paused, searching for a word. “The fuses?” I ventured. “Yes, the fuses,” he said. Junghans, a German watchmaking company, had indeed made bomb fuses, among other things, in its factory here. Now that the bunker for the fuses has been turned into a theatre and the rest of the factory rebuilt into luxury flats, it seemed almost indecent to bring up warlike thoughts.

Separated from the city by the Giudecca canal, the island reaches new depths of calm on its southern shore. Trainee gondoliers manoeuvre past the luxury craft in the island's marina. “It's a nice, quiet place. It's where I learnt to row,” Piero says.

A total of 390 flats have been built over the past ten years in the Judeca Nova development on the factory site. Some have views just of the lagoon while others offer a view of San Marco's Basilica from one window and of the lagoon and the distant Lido from another. Most impressive of all are the flats at the top, which look over the whole of Venice - the city that the travel writer Jan Morris says stands in the imagination of the world somewhere between a freak and a fairytale.

What you are buying into here leans more toward the fairytale side, with a modern twist. These are not palaces, but they are superbly equipped apartments that would suit any modern-day princess. There is a fully equipped kitchen, usually two bathrooms, central heating and air conditioning. Many of the new apartments have been sold, but some of the more impressive properties are coming up for resale. A waterfront apartment with two terraces and private jetty is available for £1,076,000, and a first-floor apartment with two bedrooms, two terraces and lagoon views can be yours for £890,000. Three new medium-size apartments at Judeca Nova are also on offer for about £340,000 each.

Although property around the Grand Canal remains hugely high-maintenance and expensive, here it more like a Venetian take on London's Docklands, with former industrial sites being used for housing. It is not too much of a concrete jungle either. The Judeca Nova blocks are sleek and minimalist without being brutal. They blend well with a 19th-century school that is part of the local university - it doubles as a nursery school and helps to show that normal life on the island continues in and around the apartments.

It is also far enough off the tourist trail to keep crowds to a minimum. The biggest draw on Giudecca is the Palladian church of the Redentore, built as a thanksgiving by those who escaped an outbreak of plague that ravaged Venice in the 16th century.

The island is also well equipped to cater for less spiritual needs, with several first-class restaurants and some more modest establishments frequented by the locals, where the food is just as good but far cheaper.

The transport links are excellent: the Giudecca Palanca water-bus stop is five minutes' walk away, and from there it is only a few stops to San Marco.

A holiday home on the island also means that you will be in good company. Piero pointed out Sir Elton John's luxurious holiday home, which is within hailing distance of the exclusive Cipriani hotel. There's no yellow brick road, but with stunning views of San Marco and the Doge's Palace I doubt if Sir Elton misses it.

Further details: www.venice-estates.com

Times recommends

• Spanish property: why it's crunch time on the Costa del Sol
• Strong Euro and credit crunch impact overseas property buyers
• How to find the perfect Paris pied-a-terre