This article is from the Australian Property Journal archive
KANEBRIDGE Property Group has launched build to rent projects across three of its western Sydney developments, with an initial offering of 1,500 apartments.
It has also established a build to rent management and services division, Kanebridge Lifestyle Services, and the group has the aim of “becoming the leading provider of build-to-rent apartments in New South Wales by 2024”.
Build-to-rent housing will be offered across Kanebridge’s The Wexford in Schofields, The Hugh in North Kellyville and Marsden Central in Marsden Park, with long-term rental options primarily of one-, two- and five-year leases.
The build-to-rent housing sector is well established in the US and is quickly gaining popularity across the UK and Europe. Australia’s first build to rent project, at Grocon and UBS Asset Management’s $550 million “Smith Collective” project the former 2018 Commonwealth Games Athletes’ Village on the Gold Coast, was launched last month, and will see every one of the 1,251 apartments and townhouses in the former Village offered solely for long-term rent.
The Kanebridge offering will be the first in the western Sydney region. Kanebridge said that while build to rent has only recently arrived in Australia, NSW has been slow to embrace it, “largely due to current restrictive legislation involving the State’s land tax laws and the Commonwealth Government’s GST treatment of ‘build to rent’ projects compared to ‘build to sell’ projects”.
US build to rent giant Sentinel Real Estate Corporation recently declared Sydney too expensive to undertake projects and is instead assessing options in Melbourne after locking in a $200 million commitment from a European pension fund.
The Victorian government recently started fast tracking development applications and established an industry working group to explore initiatives to encourage the sector.
The first build to rent approval in the state is for a 60-level apartment block in Southbank on a City Road site acquired by Daniel Grollo’s Grocon from Altus Property in January this year for around $35 million.
Several applications are currently being assessed through the fast track process, although a government spokesperson told Australian Property Journal they were unable disclose the exact number.
Salta Properties has a build to rent component in its plans for a $330 million Docklands mixed-use project on La Trobe Street, and it will allocate part of a recently approved project adjacent to its Victoria Gardens shopping centre in Abbotsford to the sector, and has announced a partnership with Abacus Property Group.
That followed Mirvac and the Clean Energy Finance Corporation (CECF) forming a $1 billion build to rent club earlier this year. Mirvac will seed the club with the 258-unit Indigo apartment project at Sydney Olympic Park.
Speaking at the Australian Property Institute’s National Property Conference earlier this month, Greystar AsiaPac chief executive officer, Chris Key, said the tax landscape and the government regulation had been critical factors that haven’t helped institutional investors in the sector down under.
“We’ve had a barrier put up in terms of offshore investment into this asset class, which is really constraining the appetite of offshore investors who invest in this product all around the world, and invest with us in many corners of the world today.” Key concluded.
Kanebridge tenants will have the option to upgrade or downgrade to an apartment in another development should personal circumstances dictate, without incurring punitive charges.
Remote access technology will be available to book any of the facilities being offered in the development, including paying rent or booking childcare services, booking KLS’ own fleet of share cars, visitor’s parking, cinema, dry cleaning and community events.
The developer also has a partnership with FiberCorp, and says residents will have internet speeds “up to 10 times faster than NBNCo”.
Tenants will have amenities tailored to their demographics, including seniors having access to an on-site nurse, and heart- and movement-monitoring technology within their apartments. Similarly, tailored amenities will be on offer for students and young families.
Longer-term tenants will qualify for vendor finance through Kanebridge Finance after three years, offering the opportunity to buy an apartment should they wish, while tenants of five years could invest in the KLS management property trust and participate in investor opportunities in other KLS build-to-rent projects.
Australian Property Journal
