A “game-changer” for real estate
In my 35 plus years in the Australian property industry, Build to Rent (BTR) is the biggest, most profound “game-changer” to the market I have seen, creating unprecedented interest.
In April 2020, property giant Lendlease launched a US$1.15 billion fund as part of its strategy update, saying residential development remained a priority over the medium-term, buoyed by “strong growth across the Build to Rent sector”, which would be underpinned by a looming Australian residential undersupply.
Vellum Funds Management is partnering with Urban Property Group to launch a AU$1 billion fund to develop Build to Rent properties, as momentum continues to grow in the fledgling sector.
The NSW state government has introduced an incentive scheme for developers to create Build to Rent developments providing a 50 percent discount on land tax for projects of more than 50 units.
The traditional residential model in Australia was for developers to Build to Sell. That is, selling all of the properties before or after completion.
Build to Rent is where projects are custom designed for renters, do not sell any of the units, and then hold and manage the asset themselves taking care of maintenance, advertising, and finding tenants.
The asset is either held for long term rental, or for a portfolio on-sale.
This effectively shuts out private investors unless they can get involved at the ground floor level of a private Build to Rent project themselves.
Read more stories on the growing Build to Rent market at the Aurient website here.
