AUSTRALIA’S largest build-to-rent development is set for Melbourne’s South Yarra, after US giant Greystar teamed up with renowned architects Fender Katsalidis for a $500 million project on a pair of sites acquired at the beginning of last year.
Greystar announced it obtained planning approval for construction of 625 units and 2,400 sqm of retail and commercial office space across two towers over the Yarra and Claremont Street sites, which were among the few remaining development opportunities of scale in a pocket of the suburb that has been built out to high-rise use.
Early in the year Greystar raised $1.3 billion for the Greystar Australia Multifamily Venture I from Ivanhoé Cambridge, APG Asset Management and Ilmarinen, establishing Australia’s largest build-to-rent venture to date. The $500 million South Yarra project is the first as part of the fund.
The 30-storey Yarra Street tower will include 382 build-to-rent apartments and 2,000 sqm of commercial office space, and the 21-storey Claremont Street tower 243 fully furnished, flexible living apartments. They will be built over a combined basement, with ground level retail offerings that will activate a pedestrian through-link and contribute to the precinct, neighbourhood amenity and South Yarra train station.
The local area has retail, food and entertainment offerings, especially along Toorak Road and Chapel Street
Build-to-rent attracts local and international backing
“This purposeful design will not only deliver a best-in-class build-to-rent experience to consumers with expertly managed apartments, workspaces and abundant amenity areas, but it will also introduce an innovative new flexible living typology to Australian renters,” Chris Key, managing director for Greystar in Australia said.
“While build-to-rent is an emerging housing product in Australia, we believe it is simply a matter of time before this residential sector gains a foothold as a primary investment allocation for institutional investors in the Australian market,” Key said.
Headquartered in Charleston, South Carolina, Greystar manages and operates an estimated US$220 billion of real estate in more than 210 markets globally and is the United States’ largest apartment operator. It has been shortlisted for the next projects under the Queensland government’s build-to-rent program.
Benjamin Martin Henry of Real Capital Analytics told Australian Property Journal’s Talking Property podcast series there are 45 build-to-rent projects in play across Australia, with a total pipeline of 15,000 to 20,000 units.
Throughout Melbourne, global real estate firm Hines has begun its foray into Australia’s build-to-rent market, buying a Brunswick site in Melbourne’s north for a 250-unit apartment complex in recent weeks, joining Mirvac and local partner, developer Milieu for the 500-apartment Albert Fields project in the suburb, on a combined one-hectare site.
Mirvac’s also has major projects next Queen Victoria Market and at Spencer Street in the CBD, while Canadian group Oxford is planning a $450 million development with over 700 units in the inner western suburb of Footscray.
James Pearce, director at Fender Katsalidis, said Greystar’s South Yarra development design “centres on integrating build-to-rent and flex housing into the character of South Yarra’s Forrest Hill precinct through the incorporation of amenity and a focus on the site’s context”.
The development will create about 970 jobs during the construction phase, and 150 further jobs through the office, retail and on-site management components post-completion.