Just over a week following the announcement of a collaboration between Lendlease and Japan’s Daiwa House to build nearly 800 build-to-rent (BTR) apartments in Melbourne Quarter, AsheMorgan has entered the scene to tackle the housing shortage in the Victorian capital with a new development in the Dockland’s area.
Additionally, nearby, there is another project underway at 208-226 Harbour Esplanade, where the Liberman family and the Tim Gurner/Qualitas BTR platform are collaborating to develop a mixed-use project that includes 550 rental apartments.
AsheMorgan submitted proposals for its ‘District Living’ project in Docklands, valued at over $700 million, which includes two buildings situated at 24 Little Docklands Drive, aiming to create more than 900 build-to-rent apartments.
The development will be adjacent to AsheMorgan’s current investment, the mixed-use urban precinct called The District Docklands.
Pending approvals and successful execution, construction is scheduled to commence in the second half of 2024.
“Over 50 per cent of residents within Docklands are aged between 20 and 40 and almost 60 per cent are working as professionals or managers, making them the primary target market for BTR,” AsheMorgan Development Director Mat Stoddart said.
It came just over a week after LendLease announced its second BTR project in Australia in the same neighbourhood.
Lendlease will develop, construct and act as the investment manager for the development, which has an end value of circa $650 million. Lendlease will retain a 25 per cent interest in the development.
The build-to-rent building will be all-electric and target a 5 Star Green Star Design & As Built v1.3 rating. Construction is due to commence in August 2023, with residents to take occupancy from early 2026.
Koji Morishige, CEO Daiwa House Australia the group is committed to broadening its development footprint in Australia and welcome the opportunity to further expand its global relationship with Lendlease to deliver a build-to-rent opportunity in Melbourne.
“Housing accessibility is front of mind for Daiwa House and this build-to-rent opportunity is reflective of our commitment to assist with increasing the supply of quality and well positioned rental accommodation for the residents of Melbourne,” he said.
According to an EY/Property Council report, launched earlier this year in April on the BTR market, the majority of the 72 projects within the pipeline are in Melbourne.
EY estimates that the current size of the build-to-rent sector in Australia is $16.87 billion (this equates to roughly 0.2 per cent of the total value of the residential housing sector), with the expectation that this value will continue to grow in the coming years. If it reached just 3 per cent of the residential market, it could be worth $290 billion.
In comparison, the build-to-rent sector comprises of 5.4 per cent of the total value of the residential sector in the UK and 12 per cent in the US.