This article is from the Australian Property Journal archive
VICTORIA’S Allan government has given the green light for Malaysian developer UEM Sunrise and US giant Greystar to transform an old Honda dealership in Collingwood into 400 build-to-rent and affordable homes.
UEM Sunrise acquired the 5,390 sqm Hoddle Street dealership site in the depths of COVID for $43 million from Jowett Motor Group, and last year pivoted on its plans for build-to-sell apartments and decided to instead sell the prized landholding and partner with major build-to-rent player Greystar on what is touted as the fast-gentrifying hipster suburb’s first build-to-rent project.
The $278 million development located close to North Richmond train station will feature a mix of one, two and three-bedroom homes, as well as food and beverage retailers and a not-for-profit space.
The Allan government has been fast-tracking the approval of build-to-rent projects and housing developments through its Development Facilitation Program, including the transformation of the Gasworks site in neighbouring Fitzroy. The accelerated assessment pathway includes a 10% affordable housing requirement for residential projects, which will apply to the UEM Sunrise and Greystar project, and is one the levers that form its ambitious Housing Statement which is targeting deliver of 800,000 homes over 10 years to alleviate crushing housing pressures.
Eligible build-to-rent developments in Victoria completed and operational from the beginning of 2022 the end of 2031 will receive a 50% land tax concession for up to 30 years and a full exemption from absentee owner surcharge.
“We’re fast-tracking more homes in great locations like Hoddle Street because we know more homes means more opportunity – particularly for young Victorians who want to live close to public transport, jobs, and services,” Member for Northern Metropolitan Region Enver Erdogan said.
More build-to-rent for Melbourne
Approval keeps inner Melbourne at the epicentre of Australia’s fledgling build-to-rent sector, with the city home to around three quarters of all build-to-rent projects completed in nation last year. Charter Keck Cramer data shows 580 apartments were completed in 2023, with 18,200 either under construction or with planning approvals.
The Melbourne market has typically delivered around 13,400 apartments per annum over the last 10 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.
Model last month unveiled its plans for a second build-to-rent project in next-door Abbotsford with the $110 million adaptive transformation of the 1886-built former Schweppes Cordial Factory, while construction kicked off in Lendlease’s new $500 million BTR development on Melbourne’s Docklands.
Docklands alone has recently seen Victoria’s Allan government approve AsheMorgan’s 925-apartment project plans near Marvel Stadium and the Esplanade; Gurner and Liberman family-backed joint venture partner City Harbour unveiled plans for a “futuristic wellness and anti-ageing utopia” within their $1.7 billion Elysium Fields project on Harbour Esplanade, which will include a build-to-rent component within its 1,350 apartments, while developer Samma Property Group was given the green light for a $250 million tower with build-to-rent on the Yarra River.
US-based Greystar has this year put the finishing touches on its $500 million build-to-rent development in Melbourne’s Fishermans Bend precinct – the largest build-to-rent project to date in Victoria, which will be home to 1,500 residents – and it has another $500 million build-to-rent project in South Yarra on the way.
Property, community housing and construction industry peak bodies roundly welcomed
federal Parliament’s passage of the build-to-rent bill on its last sitting day of the year, which could deliver 80,000 new rental homes over the next decade to a critically undersupplied market. Foreign investors of build-to-rent projects will be provided with a reduced 15% managed investment trust withholding rate. The scheme will also mandate a percentage of affordable dwellings in the projects.
For Victoria’s Labor government, approval of the Collingwood project through its Development Facilitation Program comes a month after a string of announcements aimed at defining itself on housing policy. They included unlocking supply around train stations and tram routes, the release and rezone of surplus state-owned land near trains that will unlock around 9,000 homes across Melbourne and the regions, greenfield land releases that could deliver 180,000 homes, new stamp duty concessions, and a suite of reforms to give more power to renters.
