AROUND $10 million is expected for a recently completed Parramatta apartment building tht is fully leased to global co-living operator, Hmlet, and offered to the market amid growing interest in alternative residential and accommodation asset classes.
Developed and built in 2018, the building contains 15 large fully furnished apartments ranging from one, two and three bedroom duplexes, each with generous sized balconies, and a large roof top entertaining terrace for all occupants.
Singapore-based Hmlet has a 10 year lease over 16 Rees St, which generates an approximate net income of $401,700 per annum with additional 3% annual reviews.
JLL’s Dylan McEvoy and Gordon McFadyen have been appointed to sell the asset at 16 Rees St via an expressions of interest campaign.
“Co-living is a niche sub-set of the rapidly emerging build-to-rent housing sector and is particularly attractive for investors that want reliable steady income with no leasing liability and fixed rental increases per annum,” McEvoy said. “Residential rental demand and income tends to be very stable relative to commercial property sectors, allowing it to deliver investors a strong long-term risk adjusted investment return.”
Co-living accommodation offers institutionally owned, higher quality rental accommodation with flexible short and longer term leases, and a greater focus on communal aspects.
Backed by Sequoia Capital, Hmlet operates in Singapore, Hong Kong, Sydney and Tokyo. The groups provide a flexible 30 day notice period, serviced rooms and community perks for members.
Hmlet expanded into Australia in 2018 and has eight properties, including its 82 room offering in St. Peters, as well as Marrickville, Petersham, Balgowlah, Newtown, Alexandria and Bondi. The group raised $55 million in July last year to expand its projects in the Asia Pacific, including four of its sites in Australia.
McFadyen said the unique proposition Hmlet’s model presents to the residential leasing market navigates the current leasing volatility in the traditional residential leasing market.
“Investors are not only acquiring a secure income stream but also a professional real estate manager who is dedicated to maintaining the high standards and occupancy of the apartments.”
JLL has recently transacted several similar investments that included, 35 Gower Street, Summer Hill for $11.25 million, 130 Frenchs Forest Road, Frenchs Forest, 399 Victoria Road, Rydalmere and have been appointed to sell 32 units at 60 Binalong Avenue, Allambie Heights and 20 units at 8 Pembroke Street, Ashfield.