This article is from the Australian Property Journal archive
IN a landmark $360 million deal, build-to-rent platform Local Residential will acquire Box Hill dual towers from Jeff Xu’s Golden Age Group which will become the Melbourne satellite suburb’s first build-to-rent offering.
The deal will see Local acquire the towers at Golden Age’s SKY SQR project, on a former Whitehorse City Council car park at 517-521 Station Street, above a three-level retail and food precinct, via a turnkey acquisition to create 425 build-to-rent apartments.
“We have spent considerable time exploring and researching the right direction for this project to ensure it caters to the suburb’s ever-evolving needs. Box Hill is the perfect location for build-to-rent and we have always seen ourselves as a co-developer of Box Hill; it’s important every project aligns with the council’s strategic vision and the needs of current and future residents,” said Xu, Golden Age’s founder and managing director.
“Local’s commitment to community aligns closely with ours and collectively, we will deliver an unprecedented and iconic project to Box Hill, continuing to shape this vibrant suburb by providing a fresh offering.”
Golden Age will deliver the Fender Katsalidis-designed project and upon completion, will retain ownership and management of the entertainment, lifestyle and retail precinct SKY SQR, while Local will own and operate the build-to-rent component.
Local is the platform founded by Matt Berg and Dan McLennan’s in 2021 received $500 million in financing from Macquarie to deliver its pipeline of build-to-rent developments. Its portfolio now stands at more than $1.1 billion and over 1,300 apartments over three projects in two years of operation. The Box Hill project will form the second turnkey project in Local’s inaugural external venture, the Local Australian Turnkey Venture, alongside its project in South Melbourne.
“Golden Age has an exceptional track record in delivering high-quality mixed-use projects in sought-after locations. The growth in the market of Box Hill has been extraordinary and we believe the location will endure through market cycles,” Berg said.
The Box Hill project will offer 1,170 sqm of outdoor green spaces designed by landscape architect, Aspect Studios alongside a range of exclusive amenities. Residents will have access to an 80-seat co-working space, three private dining rooms, a 20-metre indoor pool, exercise and wellness studios, games and entertainment rooms, and pet wash and electric car share facilities.
Build-to-rent moves into suburbia
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. The Box Hill deal shows investors and developers believe there is a place for the format further out.
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 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.
Melbourne’s build-to-rent/apartment market recorded $941 million in sales in the first half of 2023, according to MSCI Real Assets, making it the country’s third-most traded market.
East-meets-west retail podium vision
Golden Age unveiled its vision for the retail, entertainment and lifestyle podium late last year, which has been designed by world-renowned Hon Kong firm Oval Partnership, and spans about 12,000 sqm, including a 107-place child care centre. The retail and food precinct will have tenancies ranging from 16 sqm to 2,000 sqm. Golden Age says it is currently in talks with a number of key anchor tenants.
Construction will commence in the first quarter of 2024, with the SKY SQR retail podium due to open in Q3 2025 and residents moving in late 2025.
Xu’s Golden Age Group further established itself as Box Hill’s largest private landowner in July, acquiring a Carrington Road property that gives it five sites spanning 60,000 sqm.
