Build-to-Rent Floodgates Burst Open in Queensland
The floodgates have burst open and a surge of capital is pouring into Queensland’s fledgling build-to-rent sector as major global players stake their claims as housing supply and rental vacancies continue to rise.
With the curtain finally lifted on Lendlease’s long-awaited push to position itself in Australia’s burgeoning asset class, the Sunshine State has moved out of the shadows of Australia’s southern capitals.
The ASX-listed diversified property developer and investor revealed this week that it will deliver its first Australian build-to-rent tower in Brisbane’s RNA Showgrounds precinct at Fortitude Valley in the city centre.
It is the latest addition to the state’s burgeoning build-to-rent pipeline and follows in the footsteps of US property giants Sentinel Real Estate and Blackstone as well as local heavyweight Mirvac making their move into the Queensland market as ‘ an increasing level of institutional capital is being deployed in the sector.
Sentinel recently revealed its strategic play for some northern exposure after setting foot big on its first Queensland site next to the Gold Coast’s Robina Stadium for a 300-apartment development.
Meanwhile, US largest apartment operator Greystar has also been circling opportunities in Queensland as it continues to advance its Melbourne pipeline.
Lendlease’s launch into the Australian build-to-rent market is backed by Canadian property investment company QuadReal Property Group.
It has earmarked a site at 498 St Paul’s Terrace for a purpose-built $300 million 37-level tower with 443 apartments.
“We see enormous potential in the emerging build-to-rent sector in Australia with institutional investors attracted to high-quality residential property for its resilient income profile,” Lendlease Australia CEO Dale Connor said.
“In the Australian market, we believe there is strong demand for long-term, premium rentals in quality locations.”
▲ Render of Lendlease’s planned Australian build-to-lease debut development earmarked for Brisbane’s RNA Showgrounds precinct in downtown Fortitude Valley.
Lendlease’s global build-to-lease development pipeline is around $28 billion. It has delivered more than 2600 purpose-built rental apartments internationally and has another 1500 underway in key cities including Chicago, New York and London.
QuadReal was involved in the management and development of a global portfolio of 60,000 residential units.
“Our partnership with QuadReal will bring the best of our shared global experience and capability to deliver one of the best examples in Australia,” Connor said.
Construction of its Brisbane tower – which has achieved a 5 Star Green Star Buildings version 1 rating – is scheduled to begin early this year with completion expected by late 2025.
It will feature a mix of studio, one, two and three-bedroom apartments, as well as first-class amenities and communal spaces, including a 25m beachfront swimming pool, podcast music recording studios, barbecue pavilion, fully equipped gym, co-working facilities, outdoor spa retreat, dog washing facilities, yoga room and resident lounges.
“The residential build-to-rent sector has been one of QuadReal’s strongest global beliefs for some time, given its resilience through economic cycles and the community benefit of the commitment to increase the places people live,” QuadReal Asia’s managing director Peter Kim said.
“We are excited to invest with Lendlease in our first build-to-let project in Australia.”
Early movers in Queensland’s build-to-rent sector have included locally-based groups Frasers Property and Arklife, which have plans for a third build-to-rent foray well advanced.
Queensland-based investment manager GreenFort Capital has teamed up with Canadian property management giant BentallGreenOak and Swiss private equity firm Partners Group to develop a new build-to-rent platform.
It will be seeded by a 30-level, 364 apartment development on a South Brisbane site, which was secured by the company early last year.
