BY ANDREW CLUGSTON, PARTNER, PITCHER PARTNERS MELBOURNE
Dislocation in real estate markets is providing a compelling
opportunity for developers with the emergence of the
nascent Build-to-Rent sector in Australia.
Economic and macro challenges are creating uncertainty for real estate investors, disrupting the property industry, with a significant reduction in private residential investment over the past two years.
Built-to-Rent (BTR), also commonly referred to as Multifamily in the US, is defined as multi-unit residential developments that are designed and built as long-term rental housing under a single ownership entity. Unlocking this asset class enables the development of a new market in Australia and growth in much needed housing stock of various grades at scale. BTR provides a lower-risk investment opportunity that diversifies investor portfolios and provides income over a longer term.
To date, the Australian tax system provides no great incentive to this style of development, noting developers will not recover GST on construction and do not receive any additional tax incentives unless the product falls into the affordable housing category. There is, however, significant lobbying in the space, with a range of measures to ease cash flow on GST. It remains to be seen whether the government has the appetite to pursue these proposals.
There is currently a pipeline of over 6,000 units at different stages of development under a BTR delivery model. The current downturn in the residential market has contributed to a material increase in interest from global institutional investors who hold significant BTR exposure (namely across North American and European jurisdictions). According to CBRE figures, investor presentations have more than tripled year on year and the number of purpose-built institutional grade BTR projects under delivery has doubled.
Consequently, the advisory industry is gearing up for a wave of activity, with CBRE establishing a dedicated BTR advisory team in-country, providing know-how ranging from commercial and financial structuring to arranging equity and debt financing
作者: ANDREW CLUGSTON, PARTNER,