This article is from the Australian Property Journal archive
ASSEMBLE Communities will expand its build-to-rent portfolio after its parent company bought a northern Melbourne Toyota dealership site for $40 million.
It is likely that the 1.6 hectare Preston landholding will be transformed into a mixed-use precinct with some 500 build-to-rent units and 5,000 sqm of commercial space.
However, any development at the Preston site appears to be a long-term proposition. The property will remain under a long-term lease agreement with Eagers Automotive. Kris Daff, Assemble managing director described it as “a strategic investment, part of our long-term warehousing strategy”.
The landholding consists of 687-717 High Street, 19 Regent Street and 58-60 William Street and was acquired from McMillan Property Group who had held the property for over 50 years.
This will be the second property acquired by Make Ventures and developed by Assemble in the suburb, following a 459-dwelling project on St Georges Road. There are also projects in nearby suburbs on Sydney Road, Coburg and at 4 Ballarat Street in Brunswick.
“Our latest acquisition in Preston meets the key needs for the growing Victorian population with its prime position in Melbourne’s inner-north location,” Daff said.
The property is located at the northern edge of the Preston-High Street Major Activity Centre and is close to the proposed Suburban Rail Loop Reservoir station.
Rental stock is limited in almost 70% of local government areas in the country’s major capitals and current supply is not meeting demand, making the market ripe for the emerging build-to-rent sector to fill the void left by residential investors.
Savills forecasts that 2024 will see a peak in the annual delivery of build-to-rent residences, with more than 10,500 anticipated. This would coincide with both record levels of overseas migration and predicted residential completions reaching their lowest level since 2014.
The country’s biggest superannuation fund, AustralianSuper took a 25% share in Assemble in 2020. Assemble has a $3 billion privately funded social and affordable rental housing portfolio that includes an existing pipeline of 5,000 dwellings.
In October, it secured rezoning of two south-east Melbourne sites that will deliver $1.2 billion worth of mixed-use developments with build-to-rent and affordable housing, and has a build-to-rent development on a former confectionary site in Kensington that will feature more than 400 affordable dwellings, and some 20% of the apartments to be dedicated to social housing.
