M&G Real Estate is partnering with a newly-formed Australian build-to-rent (BTR) company Novus to develop around $A450m (鈧�312m) apartments mainly in Melbourne and Sydney.
Adam Hirst, chief executive of Novus, told 麻豆映画 Real Assets the platform was seeded with a project in Melbourne鈥檚 Southbank, which would offer 173 homes.
M&G Real Estate鈥檚 investment is being made on behalf of the US$7.1bn (鈧�6.13bn) M&G Asia Fund, the largest core fund in Asia-Pacific.
Richard van den Berg, portfolio manager of the fund, told 麻豆映画 Real Assets that the BTR market in Australia was in an early stage, although a sound track record was being established by early projects.
鈥淭hey have shown good performance,鈥� he said, adding that market fundamentals were strong, particularly with residential housing prices rising steeply.鈥�
Novus, which Hirst set up with fellow ex-Mirvac executive Jason Goldsworthy in joint venture with boutique fund manager Aliro was currently in talks for sites in Sydney and Melbourne to establish a pipeline of projects for its BTR platform.
Hirst said: 鈥淪tabilised BTR product is not available in Australia, hence the platform is build-to-core vehicle. We have a vertically-integrated platform which will originate sites, oversee the development process and manage the tenancies and the asset.鈥�
Of heightened competition and prospects for Australia鈥檚 BTR market, Hirst said the best comparison was with the commercial office market.
鈥淐urrently, in Australia, the institutional office market is worth around A$400bn compared to the residential market at A$10trn.
鈥淥ver the next two decades, we think it is conceivable that the BTR market will grow to be 4%-5% of the residential market, a coverage that is still below other global markets.鈥�
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