The property and construction industry is quickly identifying build-to-rent as one of Australia’s fasting growing sectors, so much so that roughly 35 multinational or institutionally-backed build-to-rent operators already exist in Australia alone.
Cordelia Street, by Arklife
Like many fast-growing sectors, there is an opportunity to ride the wave of institutional capital, creating space for ‘mum and dad’ investors to back a build-to-rent fund rather than buy in an individual off-the-plan property.
Institutional investors own and operate a series of build-to-rent facilities, exposing them to residential real estate but removing the risks associated with dealing with singular tenants.
But this type of investment won’t suit everyone as institutional investment creates a degree of separation between the investor and the asset itself.
Whilst all investments should be approached with a degree of caution, the values and interests of build-to-rent operators and investors are largely aligned, placing occupancy rates and the value of tenants at the top of the priority list.
It will be interesting to see what changes may or may not occur in the build-to-sell market as build-to-rent continues to mature.
Will the product mix and level of design for build-to-sell projects evolve on the back of the build-to-rent emergence, or will it remain relatively unaffected? Time will tell…
About the Author:
As Managing Principal at Rothelowman, Nigel Hobart is primarily responsible for maximising value creation for clients while maintaining a high level of strategic direction. Working collaboratively with the Rothelowman Board and National Principal Group, Nigel ensures the future success of Rothelowman and its clients.