This article is from the Australian Property Journal archive
CANADIAN pension fund Ontario Teachers’ Pension Plan and US investment firm Hines are backing Brisbane’s growing build-to-rent market, snapping up two assets in a circa $350 million deal.
The assets include a 265-unit block at 13-17 Cordelia Street in South Brisbane that will reach practical completion early in 2025. It will feature a gym, rooftop pool, residents lounge, co-working space, private dining room, and a sky garden, and target a 5-star Green star rating and a 7.0 Energy Performance Rating under the Nationwide House Energy Rating Scheme.
Also part of the deal is 28 Robertson Street in Fortitude Valley, an operational 89-unit asset completed nearly two years ago. Robertson’s ESG features include the usage of renewable energy, storm water recycling, high-performance acoustic glazing and low-energy LEDs.
Both had been acquired from Australian construction and property company Adco Group. The projects were managed on behalf of Adco by Arklife, a specialised build-to-rent platform which co-owned by Adco. Hines will provide asset management services and Arklife will continue to be the property manager for Robertson and Cordelia.
“With the Australian population expected to see continued growth and consumer preferences in the country moving more towards the rental sector, we see strong, long-term potential in the Australian multi-family market,” said Jun Ando, head of Asia-Pacific real estate at Ontario Teachers’ Pension Plan.
“These assets provide us with a strategic entry point into Brisbane,” he said.
David Warneford, country head of Australia and New Zealand at Hines, said the acquisitions “reflect our continued focus on actively pursuing build-to-rent opportunities in Brisbane, as well as in other key Australian cities with strong fundamentals”.
Charter Keck Cramer’s latest State of the Market report showed there is a requirement for between 6,000 to 8,000 apartments each year to house Brisbane’s forecast 1.6% per annum population growth to FY28, and the build-to-rent market has a “very important” role to play in the broader housing sector, the firm says.
“Hines sees tremendous potential in Australian build-to-rent for both investors and residents. It’s poised to offer stable cash flow and income growth while helping to meet the demand for quality rental housing in the country,” Warneford said.
Uncertainty around construction costs and capacities, and taxes, particularly for foreign-owned projects, has slowed investment into the country’s nascent 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. The delay to the tax changes remains the number one barrier for global investment in the sector, according to S&P Global Ratings.
The transaction of the Brisbane assets was brokered by Stuart McCann and Andrew Purdon of CBRE.
More activity south
In the southern capital, Homes has opened the doors to its third build-to-rent offering, Homes Docklands, on the edge of the Melbourne CBD.
The development is expected to house approximately 1,300 residents, further expanding Home’s already 1,500-strong portfolio across locations inner city locations Southbank and Richmond.
Located directly adjacent to Marvel Stadium at 685 La Trobe Street, Home Docklands comprises 676 apartments split across two 30 and 31-storey towers designed in collaboration with Cox Architecture. The towers are connected by a shared floor of amenities and feature a range of studio, one, two and three-bedroom apartments.
Amenities include a 25-metre pool, infrared sauna, state-of-the-art gym offering, spin and Pilates studio, and a dedicated resident services team, while a resident services team provides an on-site concierge seven days a week, on-call for services from maintenance support, and parcel and mail collection, to dry cleaning, pet grooming and furniture assembly.
Home Docklands’ food and beverage offering will include Doglands, a pub, restaurant and brewery from Moon Dog opening this month, as well as Home’s own café, Milkbar.
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.
The inner city has been the epicentre of Australia’s build-to-rent market to date. Elsewhere in Docklands, AsheMorgan has been given the green light for what will be the nation’s biggest development in the sector, a 925-apartment project, hot on the heels of Gurner and Liberman family-backed joint venture partner City Harbour unveiling plans for a “futuristic wellness and anti-ageing utopia” within their $1.7 billion Elysium Fields project also next to Marvel Stadium, which will include a build-to-rent component within its 1,350 apartments.
Also in Docklands, developer Samma Property Group was given the green light earlier this year for a $250 million tower with build-to-rent on the Yarra River, next to the Bolte Bridge.
