This article is from the Australian Property Journal archive
CANBERRA’S entryway thoroughfare Northbourne Avenue is set for further change, with the $65 million Pacific Suites building lobbed to the market as a prime build-to-rent conversion opportunity.
The 100 Northbourne Avenue property in Braddon currently is an eight-level building with 153 apartments at the gateway to the Canberra CBD.
JLL selling agents said the property presents a unique opportunity to enter Canberra’s institutional residential market through a completed asset, bypassing rising construction costs with current improvements estimated at $65 million.
“Canberra has a particularly transient workforce of high-income earners underpinned by public sector employment, consulting and supporting services which makes it a prime market for build-to-rent (BTR),” said JLL’s alternative investments – Australia, senior director David Hill.
“With residential vacancy rates of around 1% and a rental population of 38% versus 30% nationally, we expect Canberra to be a key focus for the national BTR players.”
Australia’s build-to-rent sector is set to mature into a $9.6 billion market by 2027. Construction of projects already underway is expected to peak in 2022, with 14 major institutional investors currently developing 40 build-to-rent projects. Most are currently in Melbourne.
JLL’s managing director – ACT, Tim Mutton said that as the seat of Australian government, Canberra is relatively insulated from the changing economic situation being seen more broadly.
“This relative safety is attractive to investors, and coupled with our positive economic story locally, tight vacancy rates and very controlled supply pipelines, Canberra is presenting compelling value on a risk-adjusted basis.”
As Australia’s capital, 38% of the Commonwealth of Australia’s workforce is situated in Canberra. JLL analysis shows 8.2% apartment rental growth in greater Canberra in the 12 months to April, with a vacancy rate of 1.09% in June.
The ACT has strong long-term economic growth and population growth outlooks. During FY21, ACT’s real gross state product increased by 2.8%, well above the national growth rate of 1.5% over the same period.
Expressions of interest for 100 Northbourne Avenue close on 27th September.
