This article is from the Australian Property Journal archive
PROPERTY investor Cedar Pacific has teamed up with Japanese timber management company Sumitomo Forestry to develop a $1.2 billion sustainability-focused build-to-rent portfolio across Australia and New Zealand.
The first planned project in the joint venture is 50 Quay Street in Brisbane, which is part of the Queensland Treasury’s affordable built-to-rent pilot program. The project, which has begun construction with Hutchinson Builders, will comprise 475 apartments overlooking the Brisbane River and includes 50% of the apartments offered at below-market, affordable rents.
The development is being constructed to 5-star Green Star standards with the intention to operate at net carbon neutral from day one.
“This partnership allows us to combine both companies’ development expertise with leading-edge sustainability practices, creating communities that are not only desirable places to live but also contribute positively to the environment and communities in which they are located,” said Bernie Armstrong, CEO of Cedar Pacific.
George Konstandakos, general manager at Sumitomo Forestry Australia said the pair’s combined expertise will “allow us to deliver innovative build-to-rent communities that promote the use of timber technologies such as cross-laminated timber to meet the needs of residents and contribute to the creation of a more sustainable future”.
The joint venture has a pipeline of other projects in Melbourne, Canberra, Brisbane and Auckland.
Savills Capital Advisors and Savills Australia and New Zealand advised Cedar Pacific on the capital raise.
Yasuhiro Odagane, managing director of Sumitomo Forestry Australia, said, “We are committed to expanding our sustainable development business globally, and this partnership with Cedar Pacific represents a significant step forward”.
Momentum gaining in BTR
Momentum is gaining in Australia’s fledgling build-to-rent sector, which remains focused around inner Melbourne. It’s where US giant Greystar has just reached structural completion of its $500 million project in the Fishermans Bend precinct – the largest build-to-rent project to date in Victoria – spanning three towers with 700 apartments that will house 1,500 residents from September, while Novus has just been given the green light for a 215-apartment tower on a St Kilda Road car park site.
Recent activity in the sector has also seen Macquarie-funded build-to-rent platform Local Residential close its inaugural managed venture with a US pension fund, providing the base for two new build-to-rent projects in South Melbourne and Box Hill worth a combined $650 million.
Australia’s build-to-rent sector saw a massive surge over 2023. Institutional-grade projects in the pipeline were tracking upwards by 56%, with the number of apartments under construction nationally up 65% during the year. Knight Frank is expecting the sector to hit 55,000 dedicated units completed by 2030.
Governments have been introducing tax breaks in a bit to spur development. In February, legislation was introduced to federal parliament that would see application fees for foreign investment in build-to-rent projects cut, while the Albanese government is also planning to halve the withholding tax rate for eligible fund payments from managed investment trusts to foreign residents on income from newly constructed residential build-to-rent properties.
