This article is from the Australian Property Journal archive
YET another build-to-rent project has been announced for inner Melbourne, with the local arm of the United States’ Sentinel Real Estate Corporation acquiring a North Melbourne site for a project to be delivered as part of its $1.5 billion venture with Dutch pension fund manager PGGM.
Details of the 350-apartment, dual-building development, to be built on a 6,528 sqm site in the biomedical precinct at 23-47 Villiers Street, come hot on the heels of AsheMorgan unveiling a $700 million project in Docklands, property giant Lendlease and Japan’s Daiwa House announcing a $650 million project with 797 residences on the south west edge of the CBD, and Lendlease partnering with the City of Melbourne for $1.7 billion mixed-use precinct next to Queen Victoria Market that will include build-to-rent housing.
The North Melbourne development will be Sentinel’s sixth build-to-rent development in Australia and its second in Melbourne, following its 172-apartment project, The Briscoe, in West Melbourne, which is scheduled to open later this year. Its pipeline in Australia now totals more than 1,600 rental units under various stages of development or operation.
The new apartment community will target carbon neutral certification and a 5-Star Green Star rating from the Green Building Council of Australia. On completion, it will be operated by Sentinel’s Australian property management platform, Kinleaf.
“This is a meaningful opportunity to deliver a significant boost in housing choice for the area that will support the rapidly growing health and education precinct and more broadly, Melbourne’s housing needs,” said Keith Lucas, Sentinel’s managing director in Australia said:
The biomedical precinct 23-47 Villiers Street has received $2.8 billion of investment over the past 10 years and is currently home to around 49,000 employees, according to the Victorian government research. The Villiers Street site is in immediate proximity to Australia’s largest hospital precinct including The Royal Melbourne Hospital, The Royal Women’s Hospital and The Royal Children’s Hospital, as well as the Peter MacCallum Cancer Centre, The University of Melbourne, North Melbourne Primary School and Royal Park.
“We primarily invest on behalf of those who work in the health sector, so we are very pleased that our investment in this project will support the creation of quality and low-carbon housing that is well-positioned to benefit other healthcare professionals, whilst generating healthy, long-term returns for our clients,” said PGGM’s senior director private real estate, Jikke de Wit.
Tram and bus services are less than a five-minute walk away from the site, and the future Parkville train station is within 400 metres, and will provide access to the CBD, North Melbourne’s Arden precinct, suburban Melbourne and the proposed Melbourne Airport Rail Link.
JLL’s Josh Rutman, Jesse Radisich and MingXuan Li brokered the transaction of 23-47 Villiers Street.
(Even) more build-to-rent for Melbourne
Melbourne dominates Australia’s build-to-rent pipeline, accounting for around 63% of supply, according to JLL, with nearly all of those projects in city fringe and inner suburban locations.
Other major build-to-rent projects in Melbourne include Mirvac’s development next to Queen Victoria Market, and the ASX-listed group also has projects in Brunswick and on the edge of the CBD, at 7 Spencer Street. Greystar has a $500 million development in South Yarra and another $500 million project in South Melbourne.
Build-to-rent is viewed by some to be a potential alleviator of the nationwide rental crisis, and investors wanting to position for a recovery in residential volumes and earnings are best to put their money in apartments and build-to-rent rather than house-and-land, according to UBS.
