Community the Focus as Build-to-Rent Enters Next Stage

It’s safe to say build-to-rent is here to stay. Multi-family developments are well established as a viable, lucrative housing solution, offering luxury, flexibility and community-focused living. JLL research reveals it is a sector experiencing rapid growth, with the pipeline of apartments nearly doubling in 18 months to 40,631 units. Victoria leads with 58 per cent of that pipeline, followed by Queensland (22 per cent) and NSW (14 per cent). But investment has temporarily slowed due to policy uncertainties and global capital market changes. And slow capital means fewer new build-to-rent projects. JLL head of residential research Australia Leigh Warner tells The Urban Developer that “there is clearly not enough supply at present to meet underlying demand, and this is going to be very slow to change over the next few years”. The latest Franklin St Build-to-Rent Map reveals, at least at first glance, a robust pipeline for the Australian build-to-rent sector, with 51,947 units spread across 144 projects at an estimated market value of $39 billion. But, Franklin St principal Ed Quinn says, although the pipeline looks robust, “very little supply is being built right now”. Only 31 of the 144 listed are under construction. Colliers national director capital markets, residential, Robert Papaleo says that “when you’ve got an overriding vacancy rate of around 1.5 per cent, it’s a product that is in demand”. Warner says the demand leads to increased competition between developers which is “shifting focus on to providing facilities and services to attract and retain tenants”. Papaleo also tells The Urban Developer , “we are definitely seeing an escalation of the range and variety of amenities in many of the buildings”. “But there’s been a lot completed in a very short time this year, and there is always going to be a natural leasing-up period. From what I’ve observed and what I’ve been told, though, the product is moving well and in line with expectations.” Remote work trends are driving demand for flexible amenities in smaller spaces. Sustainability and community building are key for attracting residents. Diverse and inclusive properties create welcoming environments. Property managers and management companies are adapting to these trends to remain competitive and relevant, embracing inclusive designs, policies and practices to create welcoming environments that cater to a broader range of renters. ▲ HOME Docklands residents lounge lobby. Image: Gavin Green Case in point? Prominent build-to-rent provider HOME’s third Melbourne offering, HOME Docklands. The property at 685 La Trobe Street, next to Marvel Stadium on the edge of the Melbourne CBD, comprises 676 apartments across two towers that will house about 1300 residents. The 30 and 31-storey towers, designed with Cox Architecture, offer studio, one, two, and three-bedroom apartments, and leases from six months to six years. Apartments can be rented furnished, unfurnished, or with appliances. Head of HOME Christian Grahame says a community-centric approach offers residents an “interactive program of events, diverse amenities, state-of-the-art co-working spaces, pet-friendly areas and add-ons like apartment cleaning and handyman services”. “We’ve designed HOME Docklands to be high on style, as well as providing convenience and a strong sense of security for today’s renters,” Grahame said. The development also features a 25m pool, infrared sauna, gym, spin and Pilates studio, and a dedicated resident services team providing concierge services seven days a week. A pub called Doglands, a restaurant, and a Moon Dog brewery are all opening this month, as is HOME’s own cafe, Milkbar. The development aligns with the changing demographics of the Docklands area where, according to the Australian Bureau of Statistics, 42.2 per cent of residents are employed in professional roles—significantly higher than state and national averages. HOME is planning another build-to-rent project on the vacant Bayview Eden Hotel site at Melbourne’s Albert Park. Delete Meanwhile, Canberra has just welcomed its first purpose-built build-to-rent tower with the opening of Oaks Canopy at Phillip, 2km south-west of Canberra’s CBD. Developed by Amalgamated Property Group and Base Development, and built by Milin Builders, the 14-storey tower offers 150 homes in a mix of studio, one, and two-bedroom apartments. Oaks Canopy features hotel-like concierge services, gym access, an in-house cafe, children’s outdoor play area, and entertaining spaces including a sports lounge, communal gardens and pavilion. It offers a mix of furnished apartments and a number of serviced apartments, all of which are all-electric. As more renters seek alternatives to traditional leasing arrangements, the evolving build-to-rent model’s emphasis on community, service, and flexibility may well become the new standard in urban living. Amalgamated development manager Daniel Potts believes build-to-rent is still in its infancy in Australia and says the “product here has been led by overseas markets, namely the UK and US, which are distinct from one another in the type of service, amenity and style that they offer their renters”. “We’re seeing the majority of new build-to-rent developments having high levels of service and amenity in Australia” Potts says. “Our latest build-to-rent development in Canberra is boutique in its size and our point of difference is the quality of service. “We’re hoping that this will be the catalyst for more customised, build-to-rent developments.” Canberra’s public service is evolving. Remote work and a growing private sector are leading to a more decentralised and flexible workforce looking for build-to-rent and short-term accommodation offerings. ▲ Oaks Canopy is for tenants looking for a more bespoke rental experience, says Potts. Potts hopes build-to-rent will become more prominent in Canberra but is mindful that the territory “faces all the same headwinds developers experience nationally, such as taxation, planning and availability of sites”. “The ACT Territory Plan needs to be further adapted to support new build-to-rent development,” Potts says. “We see opportunities for the conversion of old office buildings into rental accommodation, but locally imposed taxes make these conversions prohibitive.” Potts sees potential for government and private industry partnerships to “create vibrant rental communities with a mix of affordable and ‘at market’ accommodation”, such as those successfully delivered in the UK. “There’s plenty of precedents to look at and we’ll continue to champion for build-to-rent as we look to expand our portfolio and take on more opportunities locally and across the country,” Potts says. Looking ahead, Papaleo sees a sector poised for further diversification. “Not every project right now is targeting the premium renter. What I see is more build-to-rent product designed to meet different price points across the whole rental market.” Quinn also sees the build-to-rent evolution going this way. “I think we’ve been through a tough time in terms of cost escalation,” he says. “A lot of those projects that are opening now, they’ve all got very high-quality amenity offerings but probably went into construction a couple of years ago. And construction cost escalation in the last two years has been significant. “I think what will drive the next few years is a focus on keeping costs down for construction but also for renters. “We’ll still be looking at a premium rental product, but I think it will all come back to what helps someone live. “And that’s a gym, somewhere to work and communal space. Most developers won’t necessarily be able to afford to build the hotel-style amenities that those projects have now delivered.” ▲ A render of the WMK-designed build-to-rent block at Zetland. WMK managing director Greg Barnett would like to see the build-to-rent design philosophy shared across the broader housing market. “The build-to-rent innovation is about creating a sense of community,” Barnett says. “Build-to-rent developments put more effort into providing community facilities than traditional residential projects. It’s about creating those spaces where shared spaces will bring people together but also topping that off with reasons for people to interact, rather than just being in the same space. “And you must ask the question: why wouldn’t you do that for all residential developments? “We certainly do that in our retirement living developments. You’d think that would boil down to just being good quality design, whether it’s build-to-rent, retirement living or normal residential.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

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