This article is from the Australian Property Journal archive
MAXCAP Group has bought a $95 million portfolio of 125 apartments in central Melbourne – including in the country’s tallest residential tower, Australia 108 – that it will offer to the market under a “buy-to-rent-to-sell” strategy.
The portfolio gives MaxCap immediate exposure to significant projected rental and capital growth, the real estate financier said. It will rent out the units at a time of record low vacancies and surging rents and then sell for capital gain, having bought the units en masse at a low price.
The 125 units are located across CBD buildings Sapphire by the Gardens, at 308 Exhibition Street, and Premier Tower at 138 Spencer Street, Australia 108 in Southbank, and St Boulevard at 601 St Kilda Road.
“Our ‘buy-to-rent-to-sell’ strategy is unique to the market and offers a low-risk strategy with diversification, income and liquidity that appeals to our investors – different to residual stock lending and different to build-to-rent investment,” said Simon Hulett, head of direct investment at MaxCap.
“The units will now be offered to the market for rent and, later in the cycle, for sale. We are bullish about the basic supply and demand fundamentals of the Melbourne residential market.
“Further, by eliminating construction risk and acquiring completed stock, we are able to enter the tightly held rental market immediately and are able to take immediate advantage of both income growth and capital growth.”
MaxCap had formed a partnership with Colliers Residential Victoria in handpicking the 125 apartments.
Brae Sokolski, MaxCap executive director and co-founder said: “With major challenges on the supply side of the market due to new project activations being stymied by cost increases and a retreat of pre-sale investors, Melbourne is facing a major housing shortage”.
He cited statistics that show residential apartment completions for the city are forecast at 46% below the five-year average for the next five years, and noted forecast population growth and shrinking average household sizes driving increased demand over coming years.
