This article is from the Australian Property Journal archive
BUILD-to-rent investment manager Apt.Residential has spent $55 million on two historical brick commercial buildings in Sydney’s Ultimo, which it will repurpose into rental apartments and studios.
The buildings at 1-3 Smail Street, on Sydney’s CBD fringe, were constructed in the early 1900s and amalgamated by Grace Brothers Ltd in 1949 and used for storage and warehousing purposes.
They are currently let to commercial tenants and have a net lettable area of 7,796 sqm.
Apt.Residential managing director Matt Carolan said the company will now commence work on a development plan for the building that would honour the buildings’ heritage while maximising liveability for future residents.
“The building’s heritage value to Ultimo and Sydney is important. By maintaining and restoring certain design elements, the site’s history will be celebrated in our development application,” he said.
The site is close to Broadway Shopping Centre and within walking distance of Central Station, the CBD and major universities.
“We think it is a prime location for high quality rental apartments and studios,” he said.
In May, Apt.Residential announced a $1.5 billion in investment from Dutch pension fund PGGM.
The long-term partnership will see the PGGM Private Real Estate Fund tip in an initial $700 million, with phase one aiming to develop over 2,500 build-to-rent apartments with an initial focus in Sydney.
Apt.Residential’s first Sydney project is the $280 million mixed-use build-to-rent precinct in the north-west suburb of Meadowbank, comprising 291 studio, one, two and three-bedroom apartments over four low-rise buildings. It will also include over 4,000 sqm of retail and hospitality space.
The co-founders of Apt.Residential, led by ex-Urbanest CIO Matt Carolan, have experience in the Australian, United Kingdom and south-east Asian residential markets, across build-to-rent, purpose-built student accommodation, and institutional banking, in addition to investment, development, design and construction, and hospitality management.
Announcement of the Ultimo project follows developer Chapter Two last month unveiling plans to convert a low-grade office building in Brisbane’s inner north into luxury apartments, in an adaptive reuse play that may point the way to a bigger trend which could address the housing crisis and oversupply of office space.
Adaptive reuse of lower-graded commercial buildings is slowly gaining momentum as a means to address chronic housing shortages across the country while dealing with a post-COVID excess of low-grade office space and providing sustainability benefits.
On a broader scale, a study by architects Hassell conducted for the Property Council of Australia estimated that about 86 office buildings in Melbourne are “ripe” for adaptive reuse and could be transformed into 12,000 new homes.
