Developers shake up build-to-rent holdings as sector fires

Fund managers and developers are either offering sites in key apartment hubs for sale, or seeking capital to back their ambitions.

Property developers are offering up a brace of sites suited to build-to-rent apartment projects, and are also chasing capital partners to back their ambitions in the rising sector.

In one of the latest plays, US group Hines is looking to sell a trio of development sites it had assembled in Melbourne to develop specialist rental towers, which it is no longer pursuing.

Other developers, including Third.i Group and GEON Group, are looking for backers, capitalising on the relative shortage of assets available in the sector. More sites are also likely to be rezoned and then sold off to specialist developers, with players like Coronation Property looking to add to their holdings.

That developer bought two inner-Sydney sites last month from separate landholders, and it is planning about $1.4bn worth of towers. Now other landlords, including warehousing giant ESR, are selling off sites suited to build-to-rent.

Hines put the three rental apartment development sites in Melbourne on the block after a restructure by one of its Canadian clients resulted in a switch in focus to completed stock.

Their disposal could reap the firms a total of $110 –$120m, as they are expected to be chased by both build-to-rent developers and traditional players due to their boutique size.

The sales are being handled by CBRE’s Andrew Purdon and Trent Hobart, and come in the wake of Hines’ separate $350m purchases of two completed build-to-rent developments in Brisbane.

GEON is seeking an investor to back the Albion Exchange project in Brisbane.

Hines and Canada’s Cadillac Fairview forged into the market two years ago, setting up a venture to develop build-to-rent assets in Australia, and they had snared the Melbourne sites.

Cadillac Fairview is a Toronto-based developer and landlord owned by Ontario Teachers’ Pension Plan. But OTPP last year unveiled a new strategy for its real estate investments, and it is now shifting towards income-generating assets around the world.

The development sites for sale are 15–37 Bank Street, South Melbourne; 10 Ballarat Street, Brunswick; and 36-58 Macaulay Road, North Melbourne.

In Sydney, Third.i Group, alongside joint venture partner Phoenix Property Investors, are chasing a backer for the second stage of their Hume Place precinct, which will be a build-to-rent complex above Crows Nest Metro Station.

Cushman & Wakefield was tapped to sell the asset that will comprise about 476 apartments, including about 60 units designated as affordable housing for frontline and key essential healthcare workers.

Sales agent, Cushman & Wakefield’s Josh Cullen, said the build-to-rent market was becoming increasingly recognised as a vital component in addressing housing shortages and evolving urban needs.

“As cities grow and populations increase, the demand for flexible, high-quality rental options has surged. Build-to-rent developments … are designed to meet this demand by offering a diverse range of apartment sizes and layouts that cater to various demographics, from young professionals to families and essential workers,” he said.

In Brisbane, GEON has put the first stage of the Albion Exchange mixed-use development on the block, seeking either a sale or a backer for its planned towers. Savills is handling the sale of the complex in Brisbane’s inner-northern suburbs.

Albion Exchange is a 10-stage redevelopment that will overhaul the broader precinct next to Albion train station, and will deliver more than 1000 homes, with retail and commercial space.

The build-to-rent element will include two residential towers with 327 apartments in a combination of studio, one, two, three, and four-bedroom layouts. They will have retail space and top amenities.