This article is from the Australian Property Journal archive
MALAYSIAN-listed developer UEM Sunrise has pivoted on its plans for a former car dealership in Melbourne’s Collingwood, deciding to instead sell the prized landholding and partner with Greystar on what is touted as the fast-gentrifying hipster suburb’s first build-to-rent project.
UEM Sunrise acquired the 5,390 sqm site at 21-53 Hoddle Street three years ago for $43 million, and last year lobbed plans with City of Yarra Council for a $300 million, 23-storey mixed-use project with 361 apartments and 313 car parks.
Now, UEM Sunrise is selling the land for an undisclosed sum to Greystar the companies are together planning to develop about 400 apartments across two buildings, with a mix of studios and one, two and three-bedroom apartments, and feature common facilities and services for residents including swimming pool, gym, movie room, wellness and entertainment spaces, bike parking, electric vehicle charging stations, concierge and co-working spaces.
The agreement will see Greystar owner-operate the proposed development, with UEM Sunrise as the developer and delivery partner.
Cox Architecture, which designed the previous plans for the site, has been retained for the newly proposed development following a design competition amongst.
“The planned scheme will rejuvenate Collingwood’s east end with a proposal for a vibrant public town square at the heart of the site featuring food and beverage options, shops, essential services and greenery,” the partners said. New pedestrian thoroughfare links will also improve connectivity between Hoddle, Langridge and Islington Streets, and “extensive” new green space and landscaped areas will be included.
“Moving into Melbourne’s burgeoning built-to-rent market marks a new chapter for UEM Sunrise, as we continue our active expansion in the Australian market,” said UEM Sunrise CEO Sufian Abdullah.
“We’ve seen significant demand for build-to-rent projects as people seek out more housing options, as well as the sense of a long-term community. Melbourne has just become Australia’s most populated city, which has made it the right place for UEM Sunrise to invest in the asset class.”
UEM Sunrise and US-based Greystar’s commitment comes after the Albanese government announcement that it would halve the withholding tax rate for foreign investors in managed investment trusts from 30% to 15%, a move long-awaited by the sector, and which was followed Singapore-listed giant CDL making an entrance into the fast-growing sector down under, while Dutch pension fund APG Asset Management and Bouwinvest backed a new $1.5 billion Scape Australia Fund, and US giant Brookfield also announced its first project in the country.
UEM Sunrise director, Australia, Chee Wei Ong said, “As the suburb’s first build-to-rent development, we see this project setting a new benchmark for residential-led mixed use offerings in Collingwood”.
Greystar Australia managing director Chris Key said, “We are committed to making a meaningful contribution to the creation of new rental housing supply in Australia’s capital cities at a time when it is critically needed. The project builds on our strategy to provide a greater choice of quality accommodation for renters and importantly, as long-term owners and operators, to be able to provide a housing choice that offers a greater security of tenure for our residents.
Greystar in 2021 raised $1.3 billion to invest in Australia’s build-to-rent market, with backing from Ivanhoé Cambridge, a major European institutional investor and APG Asset Management. Among its Melbourne projects are a $500 million development in South Yarra that will be the largest of its type in Australia, and another $500 million project in South Melbourne.
The Hoddle Street transaction was brokered by Colliers Trent Hobart and Jozef Dickinson.
Planning documents are expected to be submitted in July, and subject to planning and approval, construction is anticipated to commence in mid-late 2024 and take approximately three years.
