Greystar sets sights on Sydney, Brisbane as first Melbourne BTR project takes shape
One of Australia’s most active Build-to-Rent players, Greystar, is looking to expand its rental home developments into Sydney and Brisbane, as its first Melbourne project takes shape.
The global property developer and manager unveiled the structure of its $500 million BTR development in South Melbourne on Wednesday, which will open to residents in September this year.
Spanning across three towers, the new development will offer 700 new rental apartments managed by Greystar as the landlord and will eventually be home to about 1,500 residents.
The South Melbourne development will be the first of Greystar’s BTR projects to open in Australia, with other BTR projects underway in the Melbourne suburbs of South Yarra, Kensington, Fitzroy and Collingwood.
Sean Ryan, senior director of development at Greystar, told realestate.com.au that the company was actively looking for new opportunities across the east coast.
“We’re actively looking to add more products to the pipeline,” Mr Ryan said.
“We’re focused on the east coast of Australia, so not just in Melbourne but in Sydney and Brisbane, too. We’re actively looking to grow.”
The South Melbourne complex will be home to about 1,500 renters when it’s completed later this year. Picture: Greystar
The arrival of new purpose-built rental homes comes can’t come soon enough, as Australia’s rental crisis goes from bad to worse.
The country’s latest rental vacancy rate sat at 1.07% in February, while rental affordability has reached its worst level in at least 17 years, according to PropTrack.
Melbourne leads the way
Melbourne was home to around three quarters of all BTR projects completed in Australia last year, as well as 73% of BTR apartments across Australia, according to the Victorian government.
Victorian planning minister Sonya Kilkenny said Melbourne was the BTR capital of the country.
Residents at the new complex will have access to swimming pools, health and wellness facilities, and flexible working spaces. Picture: Greystar
“Victoria is leading the nation when it comes to build-to-rent thanks to our planning and tax reforms and we’ll continue to pull every lever we can to enable 800,000 homes of all kinds to be built over the next decade,” she said.
“We need more homes where people want to live – this development does just that – offering rental homes close to transport, schools, parks and of course the iconic Yarra River.”
There were 580 BTR apartments completed in Melbourne last year, with some 18,200 units either under construction or with planning approvals, according to property advisory firm Charter Keck Cramer.
More BTR reforms needed
While Greystar has a pipeline of BTR projects already, Mr Ryan said their expansion plans depended on securing capital to fund further projects.
“We’ve got capital in place, which is delivering projects like this and as the year rolls through, we’ll be really starting to dial that search up,” he said.
“The feedback from capital is that we really need things like the [managed investment trust] changes at the federal level to kick in.
“When you look at returns in Australia compared to international markets, we are lower and so we need that continued support from the government to attract capital into the country.”
L-R: Greystar executive director, APAC, Adam Pillay; Greystar senior director, development, Sean Ryan; Victorian planning minister Sonya Kilkenny; and City of Port Phillip mayor Heather Cunsolo. Picture: Greystar
Last year, the federal government announced tax changes to MITs that come into effect from 1 July this year that will incentivise foreign investors to invest in BTR projects.
The government cut the withholding tax rate on eligible fund payments from MITs from 30% to 15% in an effort to lure more overseas investors to help build more rental homes.
Mr Ryan said tax and planning changes would incentivise more investors and developers to build more rental homes.
