This article is from the Australian Property Journal archive
MELBOURNE’S tallest mass timber residential building is set to be a 200-apartment, 17-storey build-to-rent project delivered in the inner suburb of Abbotsford.
The 13,000 sqm tower by Model will also be the first large-scale apartment complex in Australia to achieve Passive House certification, a measure of a development’s thermal comfort with minimal heating and cooling through insulation, airtightness, window and door design, ventilation systems with heat recovery, and elimination of thermal bridges.
Model on Johnston will be built adjacent to Victoria Park train station, at 276 Johnston Street, and will also target 6 Star Green Star and 9 star NatHERS ratings, a 50% reduction in embodied carbon compared to standard developments, be 100% powered by renewables, and operate at net-zero emissions.
Ten per cent of the apartments will be affordable housing.
The $120 million development was brokered by JLL, with Dora Stilianos of Baker McKenzie managing the legal transaction.
Model CEO, Rory Hunter said the blueprint for setting the new standard for decarbonising at scale is the “hiring of expert talent and the integration of key project development partners at every stage”.
“We’ve built an incredibly strong team at Model and put together a crack team of collaborators who we will work with at all key touchpoints, including: architects Fraser and Partners; sustainability consultants Hip V. Hype; structural and timber engineers BG&E; urban planners at Urbis; and, quantity surveyors and carbon planners at Slattery.”
Hunter says the decarbonisation at scale approach not offers a valuable safeguard on returns for investors.
“Model’s financial framework centres around the value returned over the life of the build, with outlay costs being both offset and capitalised on by significant operational costs savings and greater long term resilience resulting in a de-risked asset.”
“And by managing the development internally and focusing on sustainability, Model is positioned to capture the premium returns already seen in sustainable commercial office buildings.
JLL’s Early Mover Advantage paper released late last year showed that commercial tenants are willing to pay higher rents for net zero properties with strong sustainability credentials and that valuations benefit from lower cap rates. Model believes the trend will extend to the build-to-rent sector.
“Model on Johnston will be the first example of our ‘no compromises’ approach: decarbonising at scale; creating a warm and dry thermal envelope along with a deep sense of community for residents; and delivering strong, ongoing returns for investors.”
As vacancies across Melbourne sit at just 1.56%, only 2,100 apartments were launched for sale to the market in FY24, according to Charter Keck Cramer’s latest State of the Market – the lowest number of launches in more than 15 years.
Charter Keck Cramer’s projections suggest that over the next three years, annual completions will average approximately 8,000 apartments, with an equal split between build-to-rent and build-to-sell units. Melbourne is the only capital city which, over the next three to four years, will be more reliant on build-to-rent apartment supply than build-to-sell to deliver new higher density dwellings.
Uncertainty around taxes, particularly for foreign-owned projects, has slowed investment in the build-to-rent sector.. The federal government’s proposed bill to halve the withholding tax for foreign-owned investment trusts has been held up in the Senate and sent to a parliament inquiry.
Model appointees
Meanwhile, Model also announced its new head of development, Matthew Mattiske, and chief operating officer, Phil Shelley.
“Having Matt in the role of Head of Development will ensure we’re decarbonising at scale and building exemplar structures. While Phil will lead the delivery side to provide outstanding amenity and an unparalleled renter experience.” Hunter said.
Mattiske’s two decades of experience in property development and project management has seen him lead major projects here and offshore, working for the likes of Mirvac, Sinclair Brook and Majid Al Futtaim in the Middle East. He led a development team that oversaw the development of Australia 108 – the tallest residential building in the Southern Hemisphere – and has developed more than 13,000 residential apartments worth over $7 billion in Melbourne during the past decade.
Shelley has leadership experience in both student accommodation and the build-to-rent sector, having launched Scape’s student accommodation operating platform, and most recently build-to-rent pioneer Home. He has opened, launched and overseen more than 6,000 living sector apartments in Australia, plus supported the design, acquisition and opening of an additional 10,000 with an end asset value of more than $6 billion. He also runs his own consultancy, The Living Advisory.
