This article is from the Australian Property Journal archive
MELBOURNE is set for another major build-to-rent (BTR) project, with Gurner and Qualitas’ specialist platform partnering with Malaysian developer OSK Property to develop and operate a BTR tower within the $2.8 million Melbourne Square precinct on the edge of the CBD.
The new opportunity has been secured by the GQ platform, and offers international investors an opportunity to be a part of the group’s growth which has so far been restricted to a single investor to date.
Bursa Malaysia-listed OSK Group will retain an ownership stake in the Southbank BTR asset alongside GQ who will develop, manage and operate the tower.
The new tower will be designed by Cox Architecture and deliver around 500 residences and extensive communal amenities to the precinct.
The $2.8 billion Melbourne Square precinct encompasses five towers, a 3,745 sqm public park, full-line Woolworths, childcare and a number of retailers.
The tower will feature environmentally sustainable design including 5-Star Green Star certification, an inset energy network and a net-zero energy emissions outcome. With low cost, 100% renewable energy available, and an all-electric building, the development is set to be carbon neutral in operation.
Partnering with GQ to develop, manage and operate the BTR tower means OSK Property can convert one of the Melbourne Square towers into a retained asset within its portfolio, which sees the developer diversify asset classes within a single project.
GQ and OSK hold other assets in Southbank. GQ has a separate $350 million BTR project under construction on City Road, while OSK Property recently completed two transactions, acquiring neighbouring properties totalling 7,800 sqm at 87-117 Queensbridge Street and 190 City Road for a total of $97 million, with plans for a future mixed-use development.
The GQ platform launched in 2021 with three initial seed sites: in Melbourne, the $300 million Beach House in Melbourne’s St Kilda – which is nearing completion ahead of the first residences hitting the market in early 2024, the City Road tower, and in Sydney the 61-storey, $450 million project in Hassall Street, Parramatta.
Melbourne accounts for the bulk of the projects in Australia’s fledgling build-to-rent sector. JLL research shows 59% of projects nationally are located in Victoria, and nearly all of those are in Melbourne’s CBD, on the CBD fringe or in inner suburbs such as Collingwood and Footscray.
Construction for the Melbourne Square site is due to commence in Q1 2025.
“This joint venture makes a lot of sense for us as it’s a shovel-ready precinct that will deliver much-needed rental supply to the market in an area that’s growing and supporting a large population,” Gurner Group chief development officer, Robert Clarke said.
“With the current demand for rental stock still at historical highs, we are actively looking at many different ways to add to our portfolio whether that be partnerships, joint ventures or traditional acquisitions.”
Mark Fischer, global head of real estate and co-founder, Qualitas, “From an investment perspective, the long-term underlying fundamentals have created conditions ripe for the next phase of rental growth over the medium-term, plus the sector is aligned to investors’ demand for assets generating defensive and resilient cashflows through all economic cycles and we expect our investment partners will be attracted to this profile.”
There are forecast to be more than 4,000 build-to-rent apartments under construction and due nationally in 2024 and more than 7,500 are in various stages of the planning and construction that are due in 2025. Knight Frank has estimated the sector will see 55,000 dedicated units completed by 2030, based on the current pipeline of developments along with the UK’s current build-to-rent growth trajectory.
OSK Property Australia CEO, Chong Boon Woon, said, “This joint venture with GQ represents the next evolution of our Australian pipeline, allowing us to go where the market is, recognising the under-supply of the rental accommodation in Melbourne, while enhancing the offering at Melbourne Square and maximising the position of our existing portfolio.”
