Build-to-Rent Floodgates Burst Open in Queensland

The floodgates have burst open and a surge of capital is pouring into Queensland’s fledgling build-to-rent sector as major global players stake their claims while housing supply and rental vacancies continue to tighten.

With the curtain finally being lifted on Lendlease’s much-anticipated push to position itself in the burgeoning asset class in Australia, the Sunshine State has moved out of the shadows of Australia’s southern capitals.

The ASX-listed diversified property developer and investor revealed this week that it will deliver its debut Australian build-to-rent tower within Brisbane’s RNA Showgrounds precinct at inner-city Fortitude Valley.

It is the latest addition to the state’s burgeoning build-to-rent pipeline and follows on the coat-tails of US-based property giants Sentinel Real Estate and Blackstone as well as local heavy-hitter Mirvac making their moves into the Queensland market as a rising level of institutional capital is deployed into the sector.

Sentinel recently unveiled its strategic play for some northern exposure after putting its sizeable foot on its first Queensland site adjacent to the Gold Coast’s Robina Stadium for a 300-apartment development.

Meanwhile, the US’s biggest apartment operator Greystar also has been circling opportunities in Queensland while continuing to progress its Melbourne pipeline.

Lendlease’s launch into the Australian build-to-rent market is backed by Canadian real estate investment company QuadReal Property Group.

It has earmarked a site at 498 St Paul’s Terrace for a $300-million purpose-built 37-level tower with 443 apartments.

“We see enormous potential in the emerging build-to-rent sector in Australia with institutional investors attracted to high-quality residential real estate for its resilient income profile,” Lendlease Australia chief executive Dale Connor said.

“In the Australian market we believe there’s strong demand for long-term, premium rentals in quality locations.”

▲ Render of Lendlease’s planned Australian build-to-rent debut development earmarked for Brisbane's RNA Showgrounds precinct in inner-city Fortitude Valley.

Lendlease’s global build-to-rent development pipeline is about $28 billion. It has delivered more than 2600 purpose-built rental apartments internationally and has another 1500 in progress in key cities including Chicago, New York and London.

QuadReal has been involved in managing and developing a global portfolio of 60,000 residential units.

“Our partnership with QuadReal will bring the best of our shared global experience and capability to deliver one of the finest examples in Australia,” Connor said.

Construction of its Brisbane tower—targeting a  a 5 Star Green Star Buildings Version 1 rating—is scheduled to begin in early this year with completion expected in late 2025.

Its will feature a mix of studio, one, two and three-bedroom apartments as well as premium amenities and communal spaces, including include a 25m lap pool with beach edge, podcast-music recording studios, barbeque pavilion, fully equipped gym, co-working facilities, outdoor spa retreat, dog wash facilities, yoga room and resident lounges.

“The residential build-to-rent sector has been one of QuadReal’s strongest global convictions for some time now given its resiliency through economic cycles and the community benefit of the commitment to increase the places for people to live,” QuadReal Asia managing director Peter Kim said. 

“We are excited to be investing in our first build-to-rent project in Australia with Lendlease.”

Early movers in Queensland’s build-to-rent sector have included locally-based groups Frasers Property and Arklife, which has plans for a third build-to-rent foray well-advanced.

Queensland-based investment manager GreenFort Capital has teamed with Canadian property management giant BentallGreenOak and Swiss-based private equity firm Partners Group to develop a new build-to-rent platform.

It is to be seeded by a 30-level, 364 apartment development on a South Brisbane site, which was secured by the venture early last year.