A burgeoning asset class, build-to-rent (BTR) is increasingly attracting the attention of investors as US firms Sentinel and Blackstone look to expand their footprints.
Sentinel Fund Manager Australia, the Australian subsidiary of Sentinel Real Estate Corporation (Sentinel), and Dutch pension fund manager PGGM have launched a new agreement to construct and manage up to A$1.5 billion in BTR communities across Australia.
Furthermore, Blackstone, the world’s largest real estate investor, has expanded its already significant footprint in Australia by using its worldwide BTR experience in the UK and USA for the Australian market with the introduction of Realm Australia, a dedicated rental only firm.
The launch of a new local dedicated rental business, known as Realm Australia, has entered the market with two key apartment offerings.
Realm Caulfield, the company’s first Victorian project, is in the advanced stages of development in south-east Melbourne, with completion anticipated for November 2022.
Realm Caulfield will feature 437 apartments for rent above Caulfield Village, a vibrant shopping precinct that will include a full-line Coles and 24 other curated lifestyle and hospitality speciality stores, 300 metres from Caulfield Station, adjacent to Caulfield Racecourse, and less than 15 minutes from Melbourne’s CBD.
Prospective tenants will be able to preview and pre-sign at Realm Caulfield beginning September 1, 2022.
Realm Kangaroo Point in Brisbane, Australia, opened its doors to residents in September 2021 and is already fully leased.
Realm Kangaroo Point provides an amenity-rich lifestyle for its approximately 300 inhabitants, with a mix of one, two, and three-bedroom apartments and penthouses, as well as two and three-bedroom split-level townhouses, all available for secure lease on flexible terms.
“There’s a growing demand for rented residential properties, which spans across multiple generations. It’s important to have a range of housing types, tenures and price points in the right locations and across the housing continuum,” Tom McDonald, a Principal in Blackstone’s Real Estate team, said.
“What sets Realm Australia apart is that it is a specialist standalone rental only business.”
Meanwhile, PGGM’s first investment tranche provides the Sentinel with a pipeline of over A$700 million in early development potential.
The collaboration intends to build a nationwide portfolio of around 2,500 BTR apartments, with the first two construction sites already secured. Sentinel will provide investment management, development management, and property management services to the collaboration via its vertically integrated platform.
Sentinel constructed Element 27, Australia’s first purpose-built institutional BTR community, in Subiaco, Western Australia, in 2019. The first phase of Element 27 became the first residential complex in Australia to be certified as Carbon Neutral under the Climate Active Carbon Neutral Standard for Buildings in 2021.
Sentinel has over 1,300 BTR units in various phases of development around Australia.
Michael Streicker, President of Sentinel Real Estate Corporation said Sentinel is proud to expand our partnership with PGGM into the Australian market.
“We’re committed to continuing to deliver high quality, sustainable and community-focused living that enhances the housing choices available to Australians,” he said.
“This is particularly important at a time where changes in the housing market and supply levels are front of mind for so many.”