A family-owned Canberra developer is hoping record low vacancy levels as well as the government’s plans for new housing will bolster its first foray into the national capital’s fledgling build-to-rent market.
Evri Group has filed plans for 447 build-to-rent apartments across three buildings up to 13-storeys high in central Canberra.
The $150-million project is planned for a 10,663sq-m site bounded by Northbourne and Wakefield avenues at Braddon, 2km north of Civic Square.
The Sarris family-owned developer paid about $5.5 million for the site more than 20 years ago.
“We had done a couple of residential built-to-sell projects on the Northbourne Avenue corridor,” Evri Group development manager Rob Speight said.
“We’ve owned this site for many years, and we felt it was time to repurpose that project, those buildings.”
The developer plans to demolish vacant buildings on the site and build three, mixed-use towers in their place.
The main building will rise 13 storeys, with another four storeys of basement parking, and include a mix of commercial tenancies, residential units, and co-working office space. A second building of 10 storeys will house just apartments—a variety of one, two and three bedroom.
A third building of six storeys will include offices and shops.
The development application says the proposed residential component is one of Canberra’s “first true build-to-rent (BtR) proposals”, allowing for arrangements for short and long-term tenancies.
That’s in keeping with the ACT government, which has said it needs an extra 30,000 homes over the next five years to meet population growth.
ACT chief minister Andrew Barr last month said Canberra would increase its total housing supply from about 180,000 dwellings to about 210,000 over that five years.
“We have experienced nation-leading population growth over the past decade and this has placed pressure on our local housing market,” Barr said.
The government’s announcement coincided with the release of a build-to-rent investment prospectus, in which Canberra outlined plans to encourage more build-to-rent developments in the ACT, as well as financial support for affordability components of development proposals.
“We want to see more built-to-rent projects in the ACT, and the government will be pursing private investment into these projects over the coming years,” Barr said last month.
Speight said he was not expecting government-proposed tax offsets to influence institutional-style build-to-rent products.
“The ACT government is conflating BtR with affordable housing but when you have supply uplift it just lends to the whole conversation around affordability and while that's not a primary driver for us, it is another offset asset class,” he said.
“And once we dug below the surface a little, you find less risk on a rental basis and less long-term vacancy.
“There are lower yields than on commercial office but because of the lower risk on vacancy it became appealing.”
According to SQM Research, the rental vacancy rate in Canberra in July was just below 1 per cent.
Speight said Evri wanted to manage the finished built-to-rent operation themselves.
“We're under no illusions that there are people out there treading this space who are interested in setting up management companies to sit alongside property companies, and we're open to that as a prospect,” he said.
“However, we also think they're a little bit untested, like other things in the BtR space. And we'd prefer to set it up ourselves, keep hold and control of the energy around the project.”
Evri Group has engaged Fender Katsalidis Architects, Oculus Landscape Architects and Purdon Planning as part of the consultant team to redevelop the site.
Purdon Planning said additional amenities will include communal rooftop gardens, a swimming pool, games and function rooms, and ground-level commercial tenancies—probably a mix of retail, restaurant and cafe, as well as a commercial gym.
Industry leaders say markets such as Canberra, Perth and Adelaide are creating more opportunities for build-to-rent investors.
