Local wins finance for $315m Kensington build-to-rent complex

An artist’s impression of Local’s build-to-rent development at 350 Macaulay Rd, Kensington.

Build to rent platform Local is forging ahead with its flagship project in Melbourne’s inner northern suburb of Kensington with the group winning approval for its specialist complex and tapping builder Hacer to construct the units.

The company has also won debt financing from NAB for the $315m mixed-use project at 346-350 Macaulay Rd in the bank’s first such play in the nascent sector. The Hayball designed facility will have 477 apartments over six buildings.

Local was set up by development executives Matt Berg and Dan McLennan, who also won the backing of Macquarie Asset Management and other institutions, giving them firepower to grow beyond their initial two projects, both in the city and along the eastern seaboard.

Local founders Matt Berg, left, and Dan McLennan.

Rents have jumped in big cities, which has improved the development case for build to rent projects, and with close to 10,000 such units due to come on stream in Melbourne by 2026, providers are locking to differentiate.

Residents in the Kensington project will have access to two fully equipped private dining rooms, a gym and wellness zone, co-working space, a cinema, an art studio and lounge.

The facility is also targeting net zero carbon emissions from operations and will have a component of housing dedicated to key workers like nurses and hospitality workers, people with a disability, and women over 55 at risk of homelessness.

Mr McLennan said the company had a number of projects in its pipeline. “To reach this milestone is a huge vote of confidence in not only the project but the overall vision of Local and what we want to achieve in providing a socially responsible and sustainable way to rent, live and belong,” he said.

Securing construction debt finance from NAB is an endorsement of the company’s socially conscious model.

NAB head of real estate, corporate and institutional banking, Bill Halmarick said the bank was pleased to support Local in its inaugural project to create positive change in the Australian housing market, and noted the importance of having an element of social and affordable housing.

The project is on track for residents to move in at mid-2024.