Macquarie beefs up BTR presence
Macquarie Asset Management has invested in a Build to Rent company, Local, established by ex-Scape and Grocon acquisition manager Matthew Berg and former Summer Housing chief executive Dan McLennan – who was prior to 2016 Grocon’s head of development.
The entity is expected to hold c4000 dwellings in buildings worth a total of c$500 million.
Apartments will be targeted to people living with a disability, women over 55 who are at risk of homelessness and key employment groups including nurses and hospitality workers.
Macquarie’s investment will be financed from a fund which in June raised $1.1 billion from institutional backers.
Kensington chosen for first project
Mr Berg – who quit Grocon in 2017 – and Mr McLennan are Local co-chief executive officers.
The group’s first project is set to replace a former TNT factory at 346-350 Macaulay Road, on the north west corner of Stubbs Street, in Melbourne’s inner west Kensington, with c420 dwellings across six buildings, the tallest rising eight floors (artist’s impression, top).
On 8803 square metres, the permit-ready parcel set Macquarie back nearly $50m in September from local developer Nicole Chow.
“We’ve been involved in BTR housing and adjacent sectors for several years and we’re excited about the vision of providing a better rental experience,” Mr Berg said.
“Our ambition is to provide positive and sustainable outcomes for our residents and communities that incorporates wellbeing, customer service, flexibility and security of tenure,” he added.
Mr McLennan – who led not-for-profit Summer Housing – added Local’s projects will be designed with sustainability initiatives including onsite renewable power, low carbon materials and additional insulation.
“For a conventional developer, these may not deliver increased sale prices and therefore get put aside,” according to the executive.
“However for us, a strong focus on environmentally sustainable design will deliver a better long-term income stream, future proof our assets and offer a genuine alignment with the values of our investors, customers and staff” (story continues below).
Melbourne has become the Australian capital for BTR projects, with dozens of sites in the pipeline, many from US based companies.
Grocon is active in the sector, with its Home brand developing the ex-Richmond Plaza, with GIC, and two buildings on a site beside Marvel Stadium approved in June.
Last week we reported Samma Property Group and Brightlight acquired a Docklands parcel from Development Victoria for an asset of this type.
In August, Hines acquired a $16.5m Brunswick block for a BTR asset.
The month earlier, Altis Capital and Aware Super outlaid more than $70m for the former Bayview on the Park hotel, at 50-52 Queens Rd, for another project.
Mirvac holds several Melbourne sites for this purpose – including near the Queen Victoria Market, and on the site of the former Convention Centre – and Brunswick.
Oxford Properties and Investa, which are active in the Sydney BTR space, are also proposing a BTR investment on a former publicly owned site in inner west Footscray.
Last December, in a landmark deal, Greystar paid Chip Eng Seng $65m for a South Melbourne site earmarked for c722 dwellings in three towers.
“Investing in Local is aligned to our strategy to invest in real estate suitable for tomorrow’s world,” Macquarie global chief investment officer, Real Estate, Jelte Bakker said.
“We strongly support the BTR sector in various parts of the world and believe it has significant potential to grow in scale in Australia, driven by demographics including a growing renting population”.
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