COLLIERS has set up a new national team to cater to surging demand in Australia’s build-to-rent (BTR) sector.
To be based in Melbourne – where just over 60% of projects in the country are, according to Colliers – the BTR team will be led by national directors Robert Papaleo and Jozef Dickinson, who will work with experts on the ground in every state market.
Melbourne and Sydney have been the two key BTR investment destinations, Dickinson said, with increasing signals that Brisbane will also emerge as a meaningful market.
“Our team has witnessed the greatest momentum in Melbourne where land affordability, tax concessions and access to permit approved sites in prime near-CBD locations have been the drivers of acquisition activity.”
The build-to-rent sector accounts for an increasing share of Melbourne’s’ major residential development site market, especially on the city fringe precincts, where it has grown from $63 million, or 2% of total sales value, in 2018 to just over $300 million, or 15% of total residential development sales, in 2021.
Colliers says it has managed 85% of agency-led transactions of BTR sites and forward sales of assets upon completion across Melbourne since 2018.
Dickinson said Colliers had witnessed growing opportunity in this specialised asset class – spanning development sites, in-one-line and turn-key sales as well project fund-through– across all major markets across the country that is set to mature further over the short-term.
“Whilst the observed interest from global capital in Australia’s emerging BTR market has rapidly increased, it is consistent with the greater realisation of underlying opportunities for successful investment in Australia’s near-$9 trillion residential market.”
Colliers research also found there is 3,013 BTR units currently under construction in Australia across 11 projects due for completion this year, and five BTR projects under construction that will deliver 1,365 units in 2023.
In Colliers’ recent Global Investor Sentiment Survey, the BTR asset class ranked the third highest sector of interest among investors in the Asia Pacific region, with 34% of respondents to the survey indicating they were planning to invest in BTR.
