Greystar buys South Melbourne Build to Rent site

Greystar is paying $65 million for a South Melbourne site permitted for 722 dwellings in three towers.

Greystar is paying Chip Eng Seng subsidiary CEL Australia $65 million for a South Melbourne site permitted for 722 apartments in three skyscrapers.

The United States buyer is instead intending a Build to Rent project possibly with offices and retail.

Fifteen-85 Gladstone Street, on 5984 square metres, was once owned by BPM Corp and before that, MAB Corporation.

Singapore listed Chip Eng Seng, which paid $52m in 2016, holds other local sites including at Northcote’s 221-223 Separation St and in Adelaide, 51 Pirie St which is earmarked for a 27-storey hotel set to return the Hyatt brand to the city.

BTR in Australia ends year roaring

Investa this year described Australia’s BTR sector as “one of the most attractive institutional investment opportunities globally”.

Large scale construction for this stock has been reported about increasingly over recent years; in 2017 local developer Caydon acquired United States properties for this purpose – though at the time said the model wasn’t as viable in Australia as there.

A change in local sentiment has taken place since, following a COVID backdrop flooding the market with permit-ready residential sites, NSW and Victorian government tax incentives, private equity and financing confidence.

More generally, the influx of supply is also expected to improve housing affordability.

In February Greystar, which is part backed by Dutch pension giant APG for its Australian BTR expansion, acquired South Yarra blocks for a project with more than 500 pet-friendly units, and offices (story continues below).

Major Australian BTR players

Other major sector deals and developments this year include in Melbourne:

Mid last year Blackstone backed a Caulfield complex.

Earlier this month fund manager Qualitas announced it would diversify into the sector, seeking three seed inner-Melbourne assets to yield investments worth $1 billion.

BTR site sales outside of Victoria in 2020 include:

Greystar Chris Key told The Australian new entrants want to bring better service and amenity to renting, as well as providing longer term tenure.

“Institutional rental housing can help to solve this issue and provide the housing security that people need,” he added.

In June, Investa and Oxford unveiled a 39-floor BTR project in Sydney’s CBD.

The latter, like Greystar and with Blackstone and Sentinel Real Estate Corporation, are United States based.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of