Vanessa Orth, Managing Director Investment Management, Lendlease
Lendlease and QuadReal in partnership have announced they will deliver their first build-to-rent residential apartment building at Brisbane Showgrounds in Queensland.
While it might be Lendlease’s first foray into the Australian build-to-rent (BTR) sector, the group has a significant presence in Europe and the United States.
Since 2019 Lendlease has delivered more than 2,600 BTR apartments internationally, with another 1,500 in delivery in key cities including Chicago, New York and London. Lendlease’s global BTR pipeline is approximately AU$28 billion.
While the Brisbane Showgrounds development is the first, Lendlease is actively pursuing key opportunities in Australian capital cities.
Vanessa Orth, Managing Director Investment Management, Lendlease Australia said BTR is an attractive sector for Lendlease that fits with its integrated model of investments, development and construction.
It also helps to have significant experience in the sector, something Lendlease plans to leverage in its first Australian foray.
“Our international experience combined with our Australian residential development capability gives us a competitive advantage and creates an offering that is attractive to investors,” Ms Orth said.
She said the group has done extensive research that tells them that when it comes to Australia, amenity and a strong community were key to both driving tenant attraction and retention.
“Having well-run buildings is fundamental, along with designing-in the right mix of quality amenity. In Brisbane for example, our development will include a 25m lap pool with beach edge, podcast / music recording studios, BBQ pavilion, fully equipped industrial gym, outdoor spa retreat, yoga room and resident lounges,” Ms Orth said.
“Being pet friendly is a must have, so we’re including dog wash facilities and we’re also looking to offer co-working spaces – if these spaces are designed well then they’ll be valued and attractive to tenants. We’ll also have a variety of flexible spaces to cater to changing tenant demands.”
Ms Orth said there is enormous potential in the emerging BTR sector in Australia.
“We believe there’s a strong demand for high-quality rentals in locations that offer access to great retail and entertainment as well as transport connectivity,” she said.
“There’s a significant opportunity to show tenants that renting can be an even greater experience, with an approach that puts their needs at the heart of our offering.
“If you’re successful in creating great homes and lifestyle experiences for tenants, then BTR also becomes an extremely attractive proposition for institutional investors over the long-term who will be attracted to the core nature of investment returns from well-managed residential buildings that provide a consistent income stream.
“Many sophisticated global investors also understand the role BTR can play in helping to address housing affordability and supply, and this type of offering at such a large scale has not been available in Australia until recently.”
QuadReal has extensive experience in managing and developing a global portfolio of 60,000 residential units to the partnership, investing side by side with Lendlease.
In Queensland, the government has mentioned BTR as an important aspect in helping ease housing stress.
Three developments now being supported by the governments Build-to-Rent Pilot Project in the Brisbane area that will deliver more than 1,200 new dwellings, of which up to 490 will be provided at discounted rent.
In its Australian Build to Rent Market Update Q3 2022, Savills said the number of investors targeting the space has grown over the last 18 months with over $3.5 billion raised and committed to the sector since January 2021.
According to the report, Australia’s institutional grade BTR stock now stands at 3,800 with a further 8,400 units under construction. The future pipeline currently stands at 22,500 units, including those at application stage. This brings the total size of the sector to 34,700 units completed or in development.